Question of the Fortnight Is Jeremy Corbyn’s ‘robot tax’ a good idea?

Labour’s leader says automation will make millions redundant

nothing new about the fear that technology will replace jobs. In 1589, when William Lee built the stocking frame knitting machine, Queen Elizabeth I said: “Consider thou what the invention could do to my poor subjects. It would assuredly bring to them ruin by depriving them of employment, thus making them beggars”. More than two centuries later many examples of Lee’s machine were smashed by the Luddites.

This anxiety has re-emerged recently in response to the rise of artificial intelligence (AI) in the workplace. Politicians, trade unions and technology pioneers have all warned of mass redundancies and civil unrest. Some have called for a universal basic income, a form of welfare paid to everyone, regardless of circumstance. But at the Labour Conference in September Jeremy Corbyn indicated instead that companies benefitting from automation should pay to help society cope with the consequences. His policy was instantly branded a ‘robot tax’.

He said automation is a threat “in the hands of the greedy”, but if managed properly can be “a springboard for creativity and culture, making technology our servant and not our master at long last”. He pledged that a Labour government would pay to train workers whose jobs are replaced.

There’s growing support for the idea. Former Microsoft boss Bill Gates proposed something similar earlier this year, while South Korea could become the first country to introduce such a policy, saying it may slash tax deductions for companies that invest in automation.

Consultancy firm Mckinsey estimates that five per cent of roles could be completely replaced by AI, though it points out that almost every occupation will have some of its tasks automated.

But is this such a bad thing? Some analysts say that the rise in automation will free up workers to perform other jobs, leading to growth in new areas, and rising living standards for all.

Economists point out that while automation has always led to redundancies, it has also increased productivity. For example, typing pools, once so common in the workplace, have been replaced by faster personal computers.

Some business chiefs worry that growth would be jeopardised by a tax that they claim would discourage innovation. “A punitive tax which smacks of luddism is not the way forward and would dismay manufacturers,” says Terry Scuoler, chief executive of manufacturers’ group EEF.

Techuk, which lobbies for the tech industry, says that Corbyn is right to focus on training for workers, and praises plans for more investment in “lifelong learning”. But it dismissed extra taxation as a “short-term fix”. Its Deputy CEO Antony Walker said: “Care needs to be

taken not to put a tax on productivity growth that is so fundamental to raising living standards”.

Corbyn’s political opponents also rejected his plans. Charlie Elphicke, Conservative MP for Dover, called it the “economics of the madhouse”. He added: “It’s increasingly clear Labour would hold Britain back, destroy jobs and cause a run on the pound”.

Another problem is how to decide what counts as automation. How would the Government distinguish a robot, powered by AI, from the kind of mechanised tools used since the Industrial Revolution? Should a car maker be taxed for using robots in an assembly line?

But difficult questions like these can be answered with smart policies. Jeremy Corbyn will hope that come the next election the British public will trust him to deliver them. Persuading business leaders might be harder.

A punitive tax which smacks of luddism is not the way forward and would dismay manufacturers