Mitigate tech effects, IPPR urges

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The UK economy needs fundamental economic reforms – including to counter the monopoly power of big tech business and protect against Ai-driven job losses – a major think tank report on economic justice from the IPPR urges. Julian Blake reports.

The modern UK economy “is not working for millions and needs fundamental reform”, the IPPR’s major new Prosperity and Justice report says – urging specific reforms to address the monopoly power of tech businesses and future Ai-related losses.

The IPPR report emerged from its commission on economic justice, established after the UK’s vote to leave the EU in 2016. Commission members included Archbishop of Canterbury Justin Welby, a range of business and union leaders and economists.

“The 2020s are set to be a ‘decade of disruption’, as we confront the impacts of Brexit, continued globalisation, and demographic, technological and environmental change,” the IPPR says in its report, arguing that the UK economy needs fundamental reform and that “muddling through” is not an option.

In a wide-ranging report, the IPPR says the UK economy is held backed by a business culture dominated by short-term profiteering and low investment. It says the shareholder model of capitalism is out of date and partly responsible for UK productivity running at 13% below the G7 average.

Its headline proposals call for a £1 rise in the minimum wage, the replacement of inheritance tax and more economic devolution UK-wide.

Anticipating the effect of automation on the future of work, the IPPR says “new technologies such as artificial intelligence and robotics have raised anxieties that increasing automation will destroy large number of jobs.” It added that “past experience of automation is that, while many jobs change, many others are created as productivity and incomes rise.”

The report calls for the introduction of “managed automation”, to accelerate the adoption of new technologies like Ai, while “ensuring that workers share in the productivity gains and are helped to retrain”.

The IPPR identifies “a particular problem among the major new ‘digital platform’ companies, tending towards monopolies that were against the public interest – pointing to specific big tech platforms including Google, Facebook and Amazon.

“Platforms tend to monopoly due to the powerful ‘network effects’ of data aggregation,” says the report. “In the UK Facebook has 74% of the social network market share, Amazon is responsible for 80% of online books sales and Google has around 90% of the search engine market.

“As a result of their acquisitions of other companies, these firms have become dominant in artificial intelligence and other new technologies.”

To promote “open markets in the new economy”, the IPPR proposes a new ‘digital UK public service’ to organise and curate public data as a ‘digital commons’, including the creation of local digital commonwealth strategies and an upgrading of digital infrastructure in rural areas.

The IPPR’s 10-point plan “to achieve prosperity and justice together” features measures designed to secure “good jobs, good pay and good lives”, including:

• a clarification of the law on employment status and workers’ rights and their communication to all workers, with enforcement agencies given power and resources to investigate employers on all aspects of employment status and rights
• a trial of auto-enrolment into trade unions within the gig economy, on the model of auto-enrolment into workplace pensions.
• a WorkerTech Innovation Fund to support unions to innovate and use digital technology to recruit and organise.

In a related development this week, Labour’s shadow chancellor John McDonnell promised extra protection for workers in the gig economy, unveiling his own set of proposals to boost employee rights if elected to power.

In a speech to the TUC conference in Manchester, McDonnell said Labour would roll back many of the deregulating UK employment reforms from the 1980s.

He promised to extend full employee rights to workers in the gig economy, as part of a wider raft of employment measures. This would give Uber drivers and Deliveroo couriers the same rights as regular employees such as sick pay and parental leave.

In a government-commissioned report last year, RSA chief executive Matthew Taylor urged an overhaul of employment law to clarify the grey area between a fully employed and self-employed person. Good Work called for a new category of worker – the dependent contractor – who should receive sick pay and annual leave.

Business groups like the Institute of Directors and CBI expressed their concerns at Labour’s gig economy plans, claiming they would reduce flexibility, especially for small businesses.

IPPR: Prosperity and Justice: a plan for the new economy. Read the executive summary here.
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