Societal Impact of AI: Government Policy

It is a rather glorious day, so if people would like to remove their jackets, they should please feel free to do so.

I beg to move, That this House has considered Government policy on AI and its impact on society. It is a pleasure to serve with you in the Chair, Ms McVey. I think we all agree that AI is a transformational technology with the potential to bring many benefits to our society, but to fully realise them we will require the Government to look at radical changes to taxation, welfare and our industrial strategy. Everyone in the UK needs to benefit from a managed AI transition that puts workers and human dignity at its heart. It must make the world fairer, not more unequal, and it should give UK citizens a meaningful say in decisions that will affect their lives. Evidence from the New Contract, a pro-worker AI campaign organisation, reveals that the public are deeply suspicious about AI. Around six in 10 people expect the gains to flow to wealthy investors and big corporations, while just 7% think they will be shared fairly across our society. Understandably, seven in 10 workers are worried about the impact of AI on their jobs. Even the Foreign Secretary said recently that AI poses a Hiroshima-style threat to humanity unless global rules are put in place. In today’s digital age, a cartel of technology giants—Google, Meta, Microsoft, Amazon and Apple—wield extraordinarily influence over our lives online. These platforms have become so embedded in daily life that meaningful participation in society depends on using their services. Similarly, the digital infrastructure that facilitates our work and public services is now an essential layer of the economy, but that gives oligarchs like Elon Musk enormous power to distort public discourse. We have effectively subcontracted our right to information to a handful of big tech gatekeepers.

The hon. Gentleman is making a powerful point about big foreign tech companies. Does he believe that our dependency on six tech companies in all aspects of our lives poses a national security threat and needs to be assessed as such?

I thank the hon. Member for his intervention; I will deal with AI sovereignty a bit later in my speech. We should ensure that, like a socialist Government’s approach to energy or water, the public have a stake in the development of AI technology, to ensure that the value it creates is captured and shared for the good of society as a whole. Previous waves of technological change have brought with them huge economic disruptions, but the human and social costs that followed were not inevitable. They were the product of political choices, as Governments left workers and communities to absorb the shocks alone.

The last time we saw a change of such potential scale was when we moved from being a manufacturing economy to being more of a service economy. There were trade-offs at that time, and some people, cities, towns and villages were left behind—including in my constituency. Does my hon. Friend agree that on this occasion we can plan because we know it is coming? We need to be thinking about jobs, access and skills for younger people, and ensuring that the benefits are felt right the way across the country and not just clustered in one place.

I absolutely agree with my hon. Friend’s point about no place being left behind as a result of the AI revolution. I will develop that point a later. We can already see the first signs of AI impacting on work here. We have record numbers of young people not in employment, education or training because many entry-level jobs have disappeared.

I congratulate the hon. Gentleman on securing the debate. I spoke to him beforehand; he knows where I am coming from. My concern is for the young people of today looking for the jobs of tomorrow. My grandchildren will have to prepare themselves. We must try to equip young people. In the last few days the Belfast Telegraph reported that this may be the first time in a century that young people have lower scores in tests for memory, focus and reading than their parents. Is it not time for the Government to acknowledge the challenges and ensure that there are employment prospects for young people? If the hon. Gentleman’s objective is that, it is the right way to go.

Yes, young people and their employment prospects are intrinsically linked to the debate about the future of AI. The hon. Gentleman is right that we have to get that right for those people to have a future. We also need the Government to introduce a raft of measures to manage AI-driven changes to work. Those measures should include an employment levy on companies that replace large numbers of workers with AI, training subsidies for displaced workers, redeployment programmes to move workers into sectors with skills shortages, and a job subsidy scheme for workers and companies at the sharp end of industrial change, along with, of course, stronger social security support for those who face unemployment. We know that if it is left to the market, firms will often reach for the crudest form of automation, stripping out roles and degrading the work that remains. The alternative is that we start to advance the case for dignified work, and recognise that that will mean having meaningful worker involvement in every step of the process. The involvement of workers in adoption is often what turns a promising tool into a productive one. That is why I agree with the TUC that the Government should strengthen the Employment Rights Act 2025 to give workers a real say in decisions. There should be a duty on employers to disclose their use of AI, and a right for the workforce to be consulted and negotiate over how AI is introduced. One of the biggest challenges of AI is to ensure that everyone gets a fair share of the gains. The AI and big tech corporations in the US stand shortly to become some of the wealthiest and most powerful private actors in history. Their wealth has been built on public research and public investment, as well as all our shared written inheritance, which has trained the models they use. The fact that our tax system taxes income from work far more heavily than income from capital gives firms a direct tax incentive to automate a worker out of a job rather than employing them, and could see AI facilitate a further shift of national income away from labour and towards capital, eroding the tax base that funds the public services that we all need and want.

The hon. Gentleman is focusing on employment and big tech companies; does he agree that we need to go a step back—back to school, teachers and training? Teachers need to prepare their pupils for the future with AI, and for what that means. Does the hon. Gentleman feel that that is something not for this Minister but perhaps for a Minister in another Department?

I thank the hon. Gentleman for his second intervention—let us see whether he can make it a hat trick before I finish. The reality is that AI is here now. We have to deal with how it impacts on today’s workers and future workers as well. This is not one generation against another, and I know the hon. Gentleman understands that. The Government could seek to equalise tax treatment, actively explore widening the digital services tax to include AI companies, which it currently excludes, and raise the level of the tax from 2% to the European average. We cannot allow the use of machines to be made artificially cheaper than employing people. It is important to look at AI sovereignty, which the hon. Member for Dewsbury and Batley (Iqbal Mohamed) mentioned earlier. The UK is growing increasingly dependent on US tech, and owns little of the data infrastructure and AI models on which the future economy will increasingly rely. This repeats the pattern of recent decades in other sectors, whereby essential national infrastructure has passed into overseas ownership and money has flowed offshore, leaving British people with less and less control over the essentials of a good life. That dependence not only creates security risks, as has been mentioned, but prevents the UK from capturing and distributing any AI windfall. We need to give UK companies a meaningful chance to compete. The Competition and Markets Authority could use existing powers to take on the concentration in the cloud market, which underpins the AI companies’ business models. A progressive sovereign AI programme should involve an industrial strategy that seeks to expand public investment in the sector and impose strict conditions on private access to public assets, alongside active support for models such as co-operatives, public interest companies and other democratic ownership models, so that the gains of AI can be captured and shared throughout the UK. At the heart of this debate is the role of the public. Big decisions about AI, such as where data centres are built and how AI is deployed in public services, are being taken with little democratic input.

I apologise in advance, Ms McVey, that I need to go to a Select Committee so cannot attend the full debate. My hon. Friend is, as usual, right about everything. Does he agree that public resistance to the construction of data centres is due not just to concern about the impact on the environment, but to underlying public scepticism about the breathlessness with which politicians talk about economic growth driven by digital technology when we have an economy that has a completely unsustainable food system, is not delivering genuinely affordable homes, has rubbish public transport in many parts of the country, and is not delivering the basics?

One data centre, even a modest one, uses the same amount of electricity as 100,000 homes. The bigger the data centre, the more electricity it uses. Very few of them run off renewables, so that is another issue we need to address. The communities that host the infrastructure see the costs, in water, energy and land, without getting any of the benefits that we have discussed. These big debates are why the Government must embed ongoing public and democratic oversight of the AI transition and legislate for community benefit where infrastructure is built, including a share of the value created locally. We must ensure that the AI revolution does not lead to more power being in the hands of a few who can determine our future. Governments must build independent, publicly funded alternatives to ensure that AI is developed for the common good. Only public investment can support AI that prioritises social and environmental challenges. We need an “AI for the people” strategy—one that starts to recognise the challenges we face and has the ideas to meet those challenges head on.

Order. I will call the Front Benchers from 3.30; I will not impose a fixed time limit, but about six or seven people want to speak.