The Spectator

Britain should embrace the AI revolution

Rishi Sunak’s big speech this week was easily lampooned. Having accused Keir Starmer of ‘doomsterism’, the Prime Minister warned that Britain’s most dangerous years lay ahead, and talked of the threat from ‘colluding authoritarian states’.

Less attention was paid to the part of his speech about artificial intelligence, which was in fact genuinely optimistic. As well as bringing greater freedom, choice and opportunity, AI could double productivity ‘in the next decade’, he said.

As well as bringing greater freedom, choice and opportunity, AI could double our productivity in a decade

Imagine, he went on, a world in which every teacher is free to spend more time with struggling students, and in which a single picture of your eyes can not only detect blindness but also predict other diseases such as heart failure and Parkinson’s. Given the pace of technological innovation, this is entirely plausible.

OpenAI released its new model this week, GPT-4o, which responds to voice, images and videos, not just typed commands. The first iteration of ChatGPT was met with amazement and then panic: how long might it be before the bots lead us into war? The reaction this time was closer to impatience. If AI can be used to treat cancer, Alzheimer’s or Parkinson’s, surely we should be doing everything we can to accelerate the process.

The scenario Sunak posited – that AI doubles productivity in a decade – would transform British society. It could also lead to the fastest uplift in wages in modern history. The UK’s notoriously stagnant productivity is a trap which means the average worker is being paid no more, in real terms, than 15 years ago. It didn’t help that Sunak’s furlough scheme, welcome at the time, slowed the vital process of economic generation. This has kept more workers bogged down in unproductive companies that would otherwise have gone bust. Such jobs, naturally, pay less. There was far less furlough in America – which now has a greater share of the workforce in newer, higher-paying jobs.

The US has so far been better than the UK at availing itself of new technology, and as a result is able to achieve quicker economic growth. The salaries of American workers are moving ever further away from those of their European counterparts. Before the 2008 crash, the average American was paid 25 per cent more than the average Briton. That differential is now 40 per cent and rising fast. Per capita, Britain is poorer than five years ago, whereas America with its higher-tech economy is 9 per cent richer.

Sooner or later, people will start to notice and the public pressure will be for more AI and more automation, not less. By some measures, the UK has the least automated economy in the developed world: a hang-over from the era where employers imported low-paid workers rather than investing in new ways of working. This was something that Brexit could have remedied had new tools been used to restrict migration numbers. But the opportunity was missed, and migration doubled instead.

What Sunak didn’t say in his speech is that AI presents another huge advantage to be gained by diverging from the EU. If the UK government can approach the matter of regulation with an emphasis on opportunity rather than caution, Britain will very quickly attract exciting start-ups. If you are working in a rapidly developing area such as AI, the cost and speed of complying with regulation is crucial. If we can encourage the UK to be more open to technological change and global trends, we can begin to catch up with the US.

AI promises to do for many service industries what machinery and automation have done for manufacturing industries over the past couple of centuries. Given that services now account for four-fifths of the UK economy, this is crucial to future economic growth. So Sunak has a credible agenda and he’s right to say that the threats facing Britain will be the protectionist instincts of a Labour government. But he needs to present, as an alternative, tangible benefits from a more open Conservative regime.

Joe Biden, for example, has just imposed 100 per cent tariffs on low-price Chinese electric cars. Emmanuel Macron wants the EU to do the same, to the dismay of German car-makers who fear retaliatory tariffs from Beijing. But Berlin can be outvoted. Britain cannot. Which side will Sunak be on? Brexit means he has complete power to decide whether to welcome the Chinese cars – and so make driving more affordable for households – or to follow Biden and Macron into drawbridge-up protectionism.

The next general election needs to be about a competition of ideas, not just personnel. But the challenge for Sunak is to make the optimistic part of his message resonate as much as his scaremongering about looming threats. His message can be that an open society – free trade, light-touch regulation, lower taxes and faster economic regeneration – is better for the UK’s economy and its people. And that he’s selling a different, more attractive and persuasive vision of the future, not just asking people (yet again) to fear Labour.

AI might not be the highest-profile issue to feature in the coming general election campaign, but we badly need a government that understands how vital it will be to this country’s future.