Societal Impact of AI: Government Policy

Debate between Ben Spencer and Iqbal Mohamed

Wednesday 8th July 2026 Westminster Hall

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

It is a pleasure, as always, to serve under your chairmanship, Ms McVey. I thank the hon. Member for Poole (Neil Duncan-Jordan) for bringing forward this interesting debate, and all the Members on both sides of the House who have taken part. I recognise many of those who have participated in many debates such as this and who will, I am sure, participate in many more to come.

I will start by thanking my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes)—I wish I had attended his lecture in 2000, not least to have had the experience of being in a room where everyone disagreed with him, which must have been rather unique—for making an important point about how slowly Parliament regulates and responds to change.

My right hon. Friend the Member for East Hampshire (Damian Hinds) made a similar point about our responsiveness to this rapidly evolving sector. I also very much welcome his point about education and the challenges involved, particularly given his experience in the sector. However, more than anything, I welcome his point that nobody knows what the future outcomes will be—a point I shall come back to a bit later.

I want to focus the bulk of my remarks on employment. I share the desire of the hon. Member for Poole to look at how to support and enhance employment through the AI transition, and we do need to have more such discussions. However, I am saddened that one core proposal from Labour Back Benchers is a plan on who or what we should tax now. I regret that the hon. Member’s plans for an employment levy, which he is very passionate about and has written about previously, would not work to protect jobs—protectionism never does. It would simply put a brake on the ability of organisations, large and small, to adapt to AI, and leave us behind our competitors, losing jobs across all sectors.

The history of protectionism is, sadly, frequently a very tragic one. With each technological intervention and change, there are often calls for protectionist approaches, and when they come in—

[Iqbal Mohamed]

Will the hon. Member explain how this will work, then? Human beings at work pay national insurance, income tax and pension contributions, and then they can support their families. AI agents and AI-powered robots do not pay any of that—there are no tax receipts for the Government—so how will Government fund public services in that scenario?

[Dr Spencer]

I thank the hon. Member for his challenge regarding a future hypothetical that has yet to be realised. I think I will be able to address some of his points, but I think the premise he is setting is a bit beyond the scope of this discussion. However, I can give some concrete proposals for protecting human jobs. As a starter for 10, rather than inventing a new tax, we could start with some old ones, and rather than inventing new regs, we could start with some newish ones.

The Labour Government’s approach has been to make it as difficult as possible to employ human labour by increasing national insurance contributions from employers; making it more difficult for younger people to compete in the workplace by increasing the minimum wage; and increasing employment regulations, making it a greater gamble for businesses to take on new starters. To support jobs in the UK, we should, before looking at AI, look at the Labour Government’s policies, which are uniquely designed to make it more and more difficult to employ a person over a machine.

We are right to think about the workforce implications of the adoption of AI, but the future is always unclear and uncertain; that is the challenge of working in this sector, and I am very mindful of that position of humility as I move on to the following, more specific remarks.

Other technological disruptions, while displacing jobs, have ultimately led to more jobs through elasticity of demand. As costs decrease through automation, demand increases. That is the story of what happened with mass manufacturing in the automotive sector: to begin with, people were concerned that mechanised manufacturing would reduce jobs in the sector. Of course, the car sector exploded because the cost of a car went through the floor, and as a net result there were more jobs in the automotive sector. The issue was that they were different jobs; it is more of a transition than a replacement.

There are signals and concerns that the current decrease in the number of youth jobs is due to AI. However, as my right hon. Friend the Member for East Hampshire said, it is unclear whether that is due to AI replacement, the current prevailing economic circumstances, or a mixture of the two. The data remains unclear, but I appreciate that we need to be thinking now about what possible futures could unfold. Equally, our tech sector provides growth and jobs. The UK could be the world’s fastest AI adopter, but only if it is not punished with burdensome taxes and regulations. We are already seeing a hint—just a hint—of what AI can offer, especially in the research and health sectors. Our economic future needs AI, or we are going to be left behind.

Before I come to my final questions for the Minister, let me touch on AI and tech sovereignty, which is increasingly being talked about in the media and in this place as people focus on it more and more. AI and tech sovereignty, as described in this debate and in other forums, is illusory. We work and operate in global supply chains, with technology enmeshed around the world. Whether it is microchips built by TSMC in Taiwan, microchip etches created in the Netherlands, quantum tech built in the UK or frontier models, most of which are based in the States, our sectors are completely and utterly enmeshed.

Rather than talking about tech and data sovereignty, we should be talking about resilience and leverage. What are the core functions and features that we want to have on domestic soil? We can have a discussion about that. What should it be necessary to have on British soil, and what are the core technologies on which we want to be elite? We want to be world leaders, and to be indispensable to the world so that it looks to us, as opposed to the other way around. We need resilience and leverage rather than to chase the illusory rainbow of tech and data sovereignty.

Given my remarks about regulation and competitiveness, can the Minister rule out any part of the UK being brought into the EU AI Act? That would reduce our competitiveness with the EU. Will the Minister summarise the impact on the UK AI sector of Government taxation and employment policies? Have they been positive or negative? If they have been negative, to what extent? Can he confirm that there will be a decent statement before recess, as has been promised, on social media and the regulation of chatbots? Has he spoken to the virtual Prime Minister, the right hon. Member for Makerfield (Andy Burnham), about the importance of anti-protectionist policies in the UK’s AI sector?

Debate on the Address

Debate between Ben Spencer and Iqbal Mohamed

Wednesday 13th May 2026 Commons Chamber

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

I pay tribute to the opening speeches from the hon. Members for Bradford West (Naz Shah) and for Harlow (Chris Vince). However, context is key. The backdrop to the Gracious Speech is a Labour party engaged in open warfare—we heard something of that in earlier speeches—and a huge amount of uncertainty over what will happen in relation to the leadership of the Labour party and the current Prime Minister, and that uncertainty is playing out in the financial markets. The message that I want to convey to Labour Members is this: “Whatever you are going to do, please just do it quickly, because we need to move on.” The country needs leadership, and there are a great many important things that we need to be getting on with.

As Labour Members are mulling over their options, I want to give the House some feedback from my constituency on a couple of issues affecting its residents. The message from the constituency is that small and medium enterprise is the backbone of our economy, but it is now under intolerable pressure. Let me give a couple of examples. I received a letter from One Cobham—a business improvement district covering Cobham, in my constituency—which was co-signed by 50 other BID members, that raised the issue of business rates in particular, but also rises in rent, wages and utility costs. Two companies have already gone bust recently, and this is putting intolerable pressure on the high street and individual businesses.

[Iqbal Mohamed]

Does the hon. Gentleman agree that there needs to be a different model of business rates for small businesses that is linked to profitability and that has a maximum cap, rather than their having to pay the flat rate regardless of what they are making or not making?

[Dr Spencer]

In a different world, we would have a very different King’s Speech. We would have the alternative Conservative King’s Speech from the Leader of the Opposition—soon, hopefully, to be the Prime Minister—which would scrap business rates for those with rateable values of up to, I think, £110,000. I ask Members please to look at the details.

In recent weeks, I have visited another company, in Egham in the north of my constituency. It is a very specialist logistics company, which transports medical devices to be used in pathology investigations. In fact, it has probably supplied the pathology department at St Tommy’s across the river. The company has been operating for 40 years, but when I met its representatives, they told me that it faced going to the wall because of the increases in business rates and tax burdens. I hope to God that the company will be OK—that the Government will change course and that it continues to be successful—but if it does go to the wall, all the jobs and livelihoods of the people who work for it will go with it.

That is a story that affects businesses and organisations across my constituency. In Chertsey, Addlestone, Weybridge, Woodham, Row Town, New Haw, Oxshott and Stoke D’Abernon—in all the different parts of my constituency —businesses are struggling, and free enterprise is under pressure. It is dying, and it is dying because of the tax and regulatory burdens that are being imposed on businesses by this Government. For all the great words in the King’s Speech, the fundamental problem is the Government’s tax and spend approach and the intolerable pressure that is being placed on free enterprise and business.

This is my final message to Labour Members: “As you agonise over the direction of the Labour party leadership over the next few days, please just remember that you cannot tax a company that has gone bust.”