Palantir: Public Service Contracts

My Lords, government departments operate within a robust procurement and assurance framework, ensuring that contracts are awarded only where requirements are met and no exclusion grounds apply. Palantir’s software is used globally across public and private sectors. Within the UK Government, its use is governed through established legal and assurance frameworks. In defence, Palantir supports data integration and AI-enabled analysis, providing timely insights that improve operational planning, decision-making and effectiveness.

My Lords, I am perennially grateful to my noble friend. If we are to avoid a future Fujitsu-style scandal of even greater proportions, how can our public money, personal data, national security and reputation be safe in the hands of a company credibly implicated in gross human rights violations, both in Gaza and ICE operations in the United States?

My noble friend is quite right to challenge the Government on these incredibly important issues around human rights and how the Government establish their contracts. To be clear about the UK Government, we are talking about a relationship and contracts that are negotiated with Palantir UK. The contracts that we operate with Palantir UK have strict protocols in place. We retain full ownership and sovereign authority over all defence data, including how it is stored, how it is accessed and how it is used. Contracts with suppliers include legally enforceable provisions to ensure that data sovereignty is maintained. I understand the points that my noble friend raises, but with respect to our contracts with Palantir UK, we ensure that the correct provisions are in place.

My Lords, given the Government’s decision to partner with Palantir as part of their defence modernisation programme and the role that advanced data and AI capabilities will play in future warfare, does the Minister agree that such technologies are critical to delivering the strategic defence review, strengthening the UK’s ability to respond to hostile state threats and supporting the Government’s wider objectives for growth, innovation and defence-industrial capacity?

My noble friend makes a really important point. Many people across this Chamber will know that the responsibility of government requires difficult decisions to be made. As my noble friend Lady Chakrabarti has rightly raised, there are sometimes difficult decisions and difficult dilemmas to be resolved. Alongside that—my noble friend asked about defence—we have a responsibility to ensure that with the AI capability and the data management capability, we can take forward our strategic defence review and can give our Armed Forces and those who work with them the best possible tools to ensure that we deliver the objectives of His Majesty’s Government. That is what we seek to do, while recognising the moral responsibilities we also have.

My Lords, I am grateful, as ever, to the Minister for his lucid and authoritative response. When I was a Minister, I saw how Palantir’s technology helped to save lives in the NHS. I saw how Palantir helped to ensure that those fleeing persecution from the Ukraine war could have a safe home in this country. I also appreciate that Palantir is playing a role in defending democracy, not just in the Middle East but in Ukraine. Is it therefore not a matter of regret to the Minister, as it is to me, that the Mayor of London has specifically ruled out Palantir helping to fight crime on the streets of London when the commissioner of the Metropolitan Police has made clear that, as a result of the Mayor of London’s decision, our citizens will be less safe?

My understanding is that the mayor and the commissioner have now reached an arrangement with respect to the activity of Palantir within the Metropolitan Police, where there will be a 12-month period to establish a proof of concept as to whether Palantir can move forward. The mayor and the Metropolitan Police commissioner have agreed that because, as the noble Lord says, the commissioner believes it will help fight crime. It is a matter for them to resolve that, but it seems they have found a way in which both are happy to try to take it forward. I do not want to underestimate the moral questions that Governments sometimes have to answer. The noble Lord knows the issue of education particularly well, but let us look at the issue with respect to health: 41 ICBs and 171 trusts have signed up to use the NHS federated data platform; more than 100,000 extra patients have been seen; hundreds of thousands of patients have been safely removed from the waiting list; and nearly 94,000 patients have been supported on their cancer journey. That is the sort of dilemma that Governments need to resolve to try to find the best way forward.

My Lords, on these Benches we understand the importance of the Armed Forces modernising, including with AI. My understanding is that Palantir received a £240 million contract without the MoD going out to tender. While there are clearly national security exemptions for genuinely exceptional cases, is the Minister concerned that this could just move towards being a way of avoiding competition rather than helping national security? Will the next contract go out to procurement?

The noble Baroness is quite wise to raise that point; it is a question I asked too. Officials told me that it was the only company—the only available platform—that could provide what the MoD needed and give us the operational capability that was required. Under the single tender regime—I cannot remember the exact title—where there is no other option available, it is okay and legal for the Government to operate in that way. That is why the Government did that. Of course we are looking at whether other people can provide the sort of expertise that the noble Baroness refers to, but there was no point going out to procurement when the only provider was Palantir.

My Lords, by common assent, Palantir’s technology has rapidly and dramatically improved the Ministry of Defence’s logistics and operational planning systems without either human rights or reputational risks. Given that the current challenge confronting the MoD is recognised in the SDR, which recommended achieving a 10% efficiency saving by greater use of AI systems, what progress has been made on that objective to date?

The noble Baroness will see in due course some of the ways in which we are taking forward AI, but she is quite right to ask about this. AI is crucial to the future provision for our Armed Forces and to enabling them to have the capability and capacity they need for the conflicts of the future. Palantir is one example of the way in which we seek to take that forward. Other options will be brought forward as part of the defence investment plan. Clearly, AI is the future of much of the technological co-operation that will be needed both within government and with our allies.

My Lords, the Minister is quite right to resist attempts, which happen quite regularly, to demonise individual companies rather than looking at the underlying reality. He is also right to look at results. In this very fast-changing world of information technology, the company leading this year may well not be leading next year or even in six months. I recognise that Palantir has a major presence in the UK, which is welcome, but other companies are available. I caution against the department and the Government becoming overdependent on individual companies that almost become too big to fail, as we have seen in other sectors.

My noble friend makes a really important point. Palantir provides us with the capability that we require at the moment, but he will be reassured by the fact that, alongside granting this contract to Palantir for the next three years from this April, we are seeking to look at options with small and medium-sized and other companies that could provide the same capability, so that we have a competitive process in future. That also answers the noble Baroness’s point. I suggest that will keep Palantir on its toes in the marketplace as well.

My Lords, have His Majesty’s Government considered applying a fit and proper person test to owners and managers for public sector IT contracts, particularly those involving Britons’ private data, with particular attention to their respect for human rights and the rule of law? If they do not have that, the contracts will not be worth the paper they are written on.

I understand the point that the noble Baroness is making, but the point I made at the beginning is that these contracts are with Palantir UK. Anyone who has been a Minister knows that contracts signed on behalf of the Government have to have a fit and proper process. We will not take on people to run things for us who have criminal records of a particular sort, do not pass the monetary test or have other considerations around them that mean we see them as a security threat—of course we would not. The people who have gone through this process and been given the contracts have passed the tests set for them as part of the risk assurance process. The noble Baroness is perfectly entitled to her opinion, but taking the decision not to grant Palantir the contract would have consequences as well—many patients now being seen would not be seen, many crimes being solved would not be solved and the operational abilities and capabilities of our Armed Forces would be undermined because no one else can provide that capability. That is the side that I am on. The noble Baroness can take the side that she is on.