Palantir hires ex-Labour deputy Tom Watson as UK public sector contracts face scrutiny

Palantir’s UK expansion hits political turbulence

The appointment of former Labour deputy leader Tom Watson as a full-time executive at Palantir has thrust the US data analytics firm into the centre of a growing debate over public sector AI contracts in the UK. Watson, who served as deputy to Jeremy Corbyn before resigning in 2019, will work alongside Palantir’s UK and Europe chief executive Louis Mosley as the company seeks to expand its £427m annual UK business—despite facing legal and political challenges to its existing contracts.

Palantir’s most immediate battle is with London mayor Sadiq Khan, who has blocked a £50m deal to use the firm’s AI tools in Metropolitan Police investigations. The dispute, which is now before the courts, centres on concerns over data privacy and the transparency of AI decision-making in law enforcement. Meanwhile, the company’s £330m NHS contract is under pressure from Greater Manchester mayor Andy Burnham, who has questioned whether the deal delivers value for money amid broader austerity measures in public services.

Watson’s appointment adds a layer of political complexity. As a former Labour insider, his move to Palantir—long criticised for its work with US intelligence agencies—risks being seen as a revolving-door hire at a time when the government is scrutinising tech firms’ influence over public services. The company has sought to distance itself from its defence roots in the UK, emphasising its work in healthcare and policing, but its contracts remain contentious.

Thames Water: MPs demand emergency legislation to break hedge fund deadlock

A cross-party group of MPs has urged the government to abandon negotiations with the US hedge funds controlling Thames Water and instead push through emergency legislation to stabilise the company. The Environmental Audit Committee’s report, published today, warns that the current ownership structure—comprising around 100 hedge funds and distressed-debt investors—has left the utility with £20bn in debt and no clear path to financial recovery.

The MPs’ call for intervention comes as Thames Water’s financial woes deepen, with fears that customer bills could rise sharply to cover the company’s liabilities. The report suggests that ministers should consider temporary public control of the company’s finances, a move that would mark a significant escalation in the government’s approach to failing utilities. However, such a step would likely face legal challenges from the hedge funds, which have resisted previous attempts to restructure the company’s debt.

The crisis at Thames Water has reignited debates over the privatisation of essential services. While the government has so far resisted calls for full nationalisation, the MPs’ report argues that the current ownership model is unsustainable. "The hedge funds are not acting in the long-term interests of either customers or the environment," the report states, urging ministers to "break the deadlock" before the company’s financial position deteriorates further.

Global inequality: economists call for coordinated action ahead of UN summit

More than 1,500 economists and academics from over 100 countries have signed an open letter urging world leaders to adopt a coordinated approach to tackling extreme inequality. The letter, published ahead of next week’s UN General Assembly in New York, argues that the growing gap between the richest and poorest is not an inevitable economic outcome but a "policy choice that can be reversed."

The signatories, who include Nobel laureates and former central bank governors, are backing the creation of an International Panel on Inequality (IPI), modelled on the Intergovernmental Panel on Climate Change (IPCC). The proposed body would provide independent research and policy recommendations to governments, aiming to shift the global conversation from GDP growth to more equitable economic models.

The letter highlights several policy levers that could reduce inequality, including progressive taxation, stronger labour rights, and investment in public services. It also criticises the role of tax havens and corporate loopholes in exacerbating wealth disparities. "Extreme inequality is not just a moral issue—it undermines social cohesion, economic stability, and democratic governance," the letter states.

The initiative comes as governments worldwide grapple with the political fallout from rising inequality. In the UK, the debate has focused on wealth taxes, executive pay, and the concentration of property ownership, while in the US, proposals for a global minimum tax on corporations have gained traction. However, the letter’s authors acknowledge that political resistance to redistributive policies remains strong, particularly in countries where corporate lobbying holds significant influence.

What to watch

The coming weeks will test the UK government’s approach to both public sector AI contracts and the financial stability of critical infrastructure. Palantir’s legal battle with the London mayor over its Met Police contract could set a precedent for how AI tools are regulated in law enforcement, while the fate of Thames Water will determine whether the government is willing to intervene more aggressively in failing utilities.

On the global stage, the UN General Assembly will provide an early indication of whether the call for an International Panel on Inequality gains traction. With inequality rising in many developed economies, the debate over policy responses is likely to intensify in the run-up to next year’s elections in the UK, US, and EU.