Labour has been urged to scrap employer National Insurance to protect young people's jobs from rising costs and the impact of artificial intelligence. Former Conservative Prime Minister Rishi Sunak has led the calls, urging Labour ministers to abolish the tax.
Employers Turning to AI
Companies in law, accountancy, and the creative industries are reporting to Sunak that hiring is slowing as firms increasingly use AI to accomplish more with fewer staff. Speaking to BBC Newsnight, Sunak said ministers should "tip the balance" toward using AI to assist staff rather than replace them.
Sunak, now an adviser to AI firm Anthropic and Microsoft, stated: "There are reasons to be worried and think about the future. But we are able to do something about this."
Tax System Rebalancing
He suggested rebalancing the tax system by abolishing National Insurance "over time" and replacing it with taxes on corporate profits. Meanwhile, chief executives are telling him that "flat is the new up."
"They're talking about this concept that they think they can continue to grow their businesses without having to significantly increase employment because they're starting to see how they can deploy AI," Sunak explained. "That's why I think we do have to look at this issue very seriously and with purpose."
Positive Use of AI
The former chancellor added: "We should be thinking about, well, how do we tip the balance in favour of AI being used in that positive way… to help people do their jobs better [rather than replacing them]." He noted that the impact of AI on employment "may be different to previous technology cycles, and we want to do what we can to tip the scales in a more positive direction."
Confidence in UK Tech
Sunak described himself as a "big believer" in "Londonmaxxing" and "Britmaxxing," terms used by the tech industry to describe a recent wave of multi-billion pound investments in the sector. "I know people like to talk us down...or say that things aren't working but in this area there are huge reasons for us to feel confident and proud," he said. "We are an AI superpower any which way you look at it."
