Robots no threat to jobs and taxing them may harm economy

The UK already has fewer robots than other leading economies
The UK already has fewer robots than other leading economies

Robots do not pose a threat to UK workers’ jobs, and proposals to tax them risk damaging the economy, a new report has found.

Labour leader Jeremy Corbyn has warned of the danger of the rewards from automation going only to a few bosses of tech firms and argued for them instead to be “publicly managed to share the benefits”, though aides stressed he has not proposed a robot tax.

The new paper from the Centre for Policy Studies (CPS) think tank warns that restraints on investment in robots would impede productivity growth, depress wage growth, and encourage economic activity to relocate outside the UK, reducing the tax base.

The CPS report argues that Britain has too few robots, not too many, with only 71 robots for every 10,000 employees in manufacturing, compared with more than 300 per 10,000 employees in Germany.

Rather than costing jobs, increased automation of the workplace is likely to be “employment neutral” in the medium term, said the report.

The CPS’s head of economic research, Daniel Mahoney, said: “Going ahead with a robot tax or other measures that would discourage investment in capital would be hugely damaging for the UK.

“The UK already suffers from a low capital-labour ratio, which is dampening productivity growth and holding back wage increases. Corbyn’s plans would exacerbate this problem and simply encourage new technologies and economic activity to locate elsewhere.

“The result would be fewer well-paid jobs, lower wage growth and a reduced tax base to pay for public services.

“There is, of course, potential for automation to lead to growing income inequality in the future - although it is notable that this has yet to occur in the UK. The best way to counter this, however, is not by hampering economic progress, but by reforming skills and training.”

Mr Corbyn told the Labour conference that increased deployment of robots in the workplace was “a threat in the hands of the greedy, but a huge opportunity if it’s managed in the interests of society as a whole”.

“We won’t reap the full rewards of these great technological advances if they’re monopolised to pile up profits for a few,” he said.

“But if they’re publicly managed - to share the benefits - they can be the gateway for a new settlement between work and leisure.”