In Sir Tony Blair’s first intervention in Labour’s leadership battle, the former prime minister published a 5,000-word essay on his “radical agenda” for the future direction of the country.
The headlines have focused on his warning that “Labour is playing with fire; or more accurately, with its future, and that of the country” and that the government risks consigning the Britain to “relegation from the Premier League of Nations”.
But there’s plenty in there to draw the attention of the specialist finance industry, including reform of the planning system (“we need a transformative programme for planning reform and deregulation.
The planning system in Britain is an abomination. The government has taken significant steps, but well short of a truly radical reform.”) and the need to take advantage of artificial intelligence (AI).
ECONOMIC SHIFT
Blair’s view is that AI represents a structural economic shift on the scale of the Industrial Revolution (although to be fair, I think he was saying this about the internet in the 1990s) – that AI is the defining force that will shape the nation’s power, productivity, public services and political success over the next two decades: “Governing in the age of AI will be the principle challenge and opportunity. The route to economic prosperity…”.
His warning is that British politics is still operating with a late 20th century mindset while the economy is entering this fourth industrial era. While governments are focused on marginal arguments over tax and spending, the real issue is whether countries can adapt fast enough to AI, robotics and advanced computing.
The UK has an opportunity because we already have strong universities (which he says are “critical to the technology economy”), a large AI sector and significant computing capacity. If government acts quickly, we could become a leading AI state rather than a consumer of technology built elsewhere.
NEW NATIONAL PURPOSE
The state itself must be rebuilt around technology. That includes AI-driven public services, automated administration, predictive healthcare, personalised education and more data-led government.
His broader “New National Purpose” papers describe this as redesigning Whitehall and public services around digital infrastructure rather than incremental reform. He sees AI as the route out of Britain’s low-growth, low-productivity trap. He argues that without a major productivity shock from technology, Britain cannot sustainably fund public services or welfare commitments.
It feels as though he’s suggesting excessive caution around AI could leave Britain behind the US and China.
Interestingly, as part of this, he suggests we must prioritise cheaper energy and electrification over net zero and use what is left of our North Sea oil and gas resources: “This is essential for our competitiveness and for taking advantage of AI”.
Blair treats AI capability as a strategic national asset – comparable to military strength. Countries that dominate AI infrastructure and data will have disproportionate economic and political influence. He doesn’t want to see Britain “marooned on an island or irrelevance”.
THE MORTGAGE SECTOR
His Tonyness’s prescription for the country could equally apply to the mortgage sector. For domestic policy, governments must address what it means to govern in the age of AI. For commercial mortgages and bridging finance, lenders must address what it means to provide finance in the AI era.
They will need to reorganise their entire operation around the harnessing of the 21st-century technological revolution.
Firms that continue operating as enhanced versions of 2005 era lenders risk being structurally outcompeted by technology-native credit businesses. Those lenders which understand it, will see their businesses prosper; those which don’t, won’t.
FRAGMENTED UNDERWRITING
While Blair argues politics is still operating with a “20th-century feel” while the economy is entering a new industrial revolution led by AI, the same criticism could be levelled at much of the specialist lending market.
Many lenders still rely on fragmented underwriting systems, manual case handling, semi analogue broker journeys and operational models dependent on human interpretation of non-standard borrower circumstances. That model historically justified specialist pricing premiums. AI threatens to compress them.
“Lenders that embrace AI will emerge triumphant from the revolution.”
Blair’s broader point about “efficacy” over bureaucracy also maps directly onto the sector.
He argues that institutions able to “get big things done” will outperform those trapped in legacy systems.
In specialist finance, that favours lenders capable of doing mortgages at bridging speed. Of bringing momentum into lending.
The likely result is consolidation pressure. Specialist lenders with capital to invest in data infrastructure and AI capability may strengthen their position rapidly.
Smaller lenders reliant on manual operational expertise could struggle, defending only increasingly niches corners of the market.
Lenders that embrace AI (with the appropriate guard rails in place – this is financial services after all) will emerge triumphant from the revolution.
