Tax breaks for businesses which use robots urged by committee chaired by Leeds West MP Rachel Reeves

The Chancellor should bring forward proposals for new tax incentives to encourage investment in robots to boost productivity, a group of MPs has urged.

Leeds West MP Rachel Reeves, chair of the Commons Business, Energy and Industrial Strategy Select Committee. Photo: Tony Johnson

In a new report, the Commons Business, Energy and Industrial Strategy Select Committee warns that if the transition to a more automated workplace is managed badly, entire groups and regions could be left behind and British businesses could find themselves uncompetitive.

The cross-party group of MPs has said that rather than introducing a so-called "robot-tax", the Treasury should actually offer incentives for firms who spend on robotics in the next Budget.Committee chair, Labour MP Rachel Reeves, said the UK is way behind other G7 nations in its adoption of robot and automation technologies.

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She added: "The real danger for the UK economy and for future jobs growth is, however, not that we have too many robots in the workplace but that we have too few.

For all the potential of the UK, and despite our excellent tech and research base, the fact is that we are lagging behind our international competitors in our adoption of robot and automation technologies."Productivity, economic growth, and ultimately job-creation and higher earnings, will flow to those countries that capitalise on these technologies."

Ms Reeves said the Government "has failed to provide the leadership needed to help drive investment in automation and robot technologies".

She added: "If we are to reap the potential benefits in the future of improved living standards, more fulfilling work, and the four-day working week, the Government needs to do more to support British businesses and universities to collaborate and innovate."

The report urges the Government to come forward with a UK Robot and AI Strategy by the end of 2020.

The committee also calls for a greater focus on education and training in areas relating to automation and to support workers as the economy transitions in the coming years.

A Government spokesperson said: “Jobs and workplaces across the UK are evolving, and we want people to be able to capitalise on these opportunities. We will therefore consider the findings of today’s select committee report carefully.

“We are investing nearly £1bn to develop the AI sector, helping ensure people have the skills to navigate the challenges of automation, including through a dedicated National Retraining Scheme. Our new Robotics Growth Partnership will also lead to a new Robotics Action Plan for the UK to help identify and make the most of future opportunities.”