Artificial Intelligence: Impact on Employment

Baroness Lloyd of Effra Excerpts

Monday 13th April 2026 Lords Chamber

[Baroness Berger]

To ask His Majesty’s Government what assessment they have made of the impact of developments in artificial intelligence on current levels of employment.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

The AI and the Future of Work Unit has been set up to research and monitor AI’s economic and labour market impacts and to provide policy advice. The unit published its first assessment in January, finding that AI capabilities are progressing rapidly and noting that hiring has been falling faster in occupations more exposed to AI, although it stressed that whether AI is responsible for these patterns remains unclear. To further increase the Government’s capability to monitor and anticipate AI’s economic impacts, the Chancellor announced a new AI Economics Institute supplementing the future of work unit with a broader focus on the economics of AI.

[Baroness Berger (Lab)]

My Lords, we already know there is a growing challenge in the graduate job market exacerbated by AI, as we have recently discussed in your Lordships’ House. A study by King’s College London has shown that senior leaders across all job markets will be needed who cannot be replaced by AI. What plans do the Government have to ensure there is no dearth in senior leadership further down the line due to a lack of entry-level recruitment?

[Baroness Lloyd of Effra (Lab)]

The Government recognise that entry-level roles are important for building skills and progression pathways that underpin future leadership capability. Progression to senior leadership depends not only on job numbers but on the quality of training and in-work development. The Government want everyone to have access to the best opportunities, no matter what stage they are at in their career. Through the £1.5 billion youth guarantee and the growth and skills levy, we are expanding high-quality training, apprenticeships and workplace experience so people can progress in a changing, AI-enabled labour market.

[Lord Kirkhope of Harrogate (Con)]

My Lords, one of the good things about the Government’s industrial strategy was the establishment of regional professional businesses and services hubs, partly to look into the provision of AI services, supported by Skills England which was to map where AI skills gaps were. Will the Minister please update us on when those hubs will be operational and when Skills England will produce their first statistics?

[Baroness Lloyd of Effra (Lab)]

Reducing the AI skills gap and understanding the impact of the labour market’s change due to AI is indeed something that we are looking at closely. DSIT regularly reviews the AI labour market and skills gap, and we are working with Skills England to fully understand the needs. I will need to update the noble Lord on the role of the regional centres he mentions after this session.

[Lord Clement-Jones (LD)]

My Lords, the Government have cited their own Ipsos research that 84% of people at work have not undertaken any AI training in the past 12 months. The Government’s AI skills boost programme is welcome, but it is not enough. Will the Minister commit to personal learning accounts, giving individuals genuine choice over their upskilling, and to prioritising putting the creativity and critical reasoning at the heart of the national curriculum that AI cannot replicate?

[Baroness Lloyd of Effra (Lab)]

The noble Lord is right that AI poses challenges and opportunities to those in the labour market. The AI skills boost programme that the Government have announced is extremely ambitious in its reach. It will see a major expansion to upskill 10 million workers, which is a huge endeavour and will see the UK fit to grab the opportunities of the AI technology that is coming today.

[Lord Empey (UUP)]

My Lords, will the Minister tell the House what discussions she has had with our universities and colleges of further education to assess what changes they are making in the curriculum that they are offering to students and the nature of those? There is a risk with AI that a lot of junior degree activity will be removed. It is therefore also important to find out what research these institutions are undertaking to try and assess the future implications.

[Baroness Lloyd of Effra (Lab)]

We work closely with Skills England and with the DfE to understand the changes that AI is bringing and what that means in terms of the education system, what skills students need to develop and how to apply them. We are supporting the expansion of AI education in universities, for example through the TechLocal AI degree accelerator. This is a conversation that is ongoing. As the noble Lord suggests, it is something that we need to be very mindful of.

[Baroness Nargund (Lab)]

My Lords, I declare my interest as chair of The Pipeline, a gender parity consultancy. Our latest research has shown that 43% of young women entering the workforce are concerned that AI will replace them. Given that AI is increasingly taking over administrative tasks and that women are overrepresented in administrative roles, what assessment have the Government made of the gendered impact of AI on employment? What targeted plans are in place to support all those in the workforce, particularly young women, with AI training and upskilling opportunities?

[Baroness Lloyd of Effra (Lab)]

My noble friend is right that there may be differential impacts throughout the labour market. ONS analysis suggests that administrative roles may see greater transformation from AI, while our AI adoption research shows that marketing, administration and IT are the most common areas of current or planned use. The AI and the Future of Work Unit is monitoring sectoral and distributional impacts, including on gender and region. We will support those through the commitment to upskill 10 million people by 2030 and, alongside the Women in Tech Taskforce, to champion diversity in the UK tech sector.

[Viscount Camrose (Con)]

My Lords, I declare my technology interests as set out in the register. We should be cautious about the assumption that improved AI skills alone will enable job seekers to adapt to a changing labour market. The misapplication of AI in recruitment often generates unmanageable volumes of synthetic job applications, making it impossible to identify genuinely qualified candidates. Without an efficiently functioning recruitment market, the Government’s efforts to boost employment will be even less effective than they currently are, so will the Minister please encourage the future of work unit to look into the matter urgently?

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

The noble Viscount has rightly highlighted the importance of responsible AI in recruitment guidance. As he knows, the Government have set out good practice for recruitment practitioners and agencies in procuring and deploying AI systems for HR and recruitment. I am sure that this will be a topic that the future of work unit will consider as it takes forward its work.

[Lord Londesborough (CB)]

Does the Minister agree that AI is becoming a rather convenient punchbag for our rising unemployment? Are not the real culprits low growth, poor productivity and increasing costs and taxes on jobs? If so, why not focus on the opportunity rather than the perceived threat and do more to encourage the creation of new roles around AI, notably in the fields of technology, data and financial services?

[Baroness Lloyd of Effra (Lab)]

Indeed, the OECD estimates that widespread AI adoption could boost UK productivity by 0.4 to 1.3 percentage points annually. That is why we have an AI Opportunities Action Plan and why we have already progressed 38 of the 50 recommendations. The AI sector already employs 86,000 people in the UK and is growing rapidly. We are doing everything we can to support the safe and sustainable adoption of AI so that companies and workers can benefit.

[Lord Vaizey of Didcot (Con)]

My Lords, the noble Lord’s question was spot on, but may I focus on a slightly different area? I read over the weekend that Anthropic has produced software that it now deems too dangerous to launch publicly because of its huge impact on cyber security. This artificial intelligence is apparently able to crack all the flaws and bugs in cyber security systems, which obviously could have a devastating impact on our economy, given that it is now so digitally based. What plans do the Government have to discuss this concerning issue with Anthropic?

[Baroness Lloyd of Effra (Lab)]

We take the security implications of frontier AI seriously. Through our AI Security Institute, we have world-leading expertise in this area and maintain continuous engagement with global technology leaders. For obvious reasons, I am not going to comment on the specifics of all those engagements, but, in order to stay ahead of evolving threats, businesses should act now to strengthen their online defences. The NSCS’s guidance outlines how to secure Cyber Essentials certification and patch vulnerabilities quickly. AI capabilities are moving fast, but strong fundamentals are still effective.