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

Labour’s leader says au­to­ma­tion will make mil­lions re­dun­dant

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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

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