Fourth Industrial Revolution

Justin Madders Excerpts

Thursday 8th September 2016 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I congratulate the hon. Member for Havant (Mr Mak) and my hon. Friend the Member for Hove (Peter Kyle) on securing an important debate that has been very informative so far. I hope that it is a subject to which we will return many times in the future.

Before I talk a little about the future, I want to talk a little about the past. The title of this debate, the “Fourth Industrial Revolution”, evokes images of previous industrial revolutions, and of course the first, which began—whereabouts exactly has been the subject of some debate today. It has been romanticised. We should not forget the child labour, the decline in life expectancy, the exploitation and the unsafe practices that were all huge features of the early years of the industrial revolution. I am not suggesting for a minute that we are going to return to the days of the poorhouse, but history should act as a warning that change of the magnitude we saw in the first industrial revolution is not all positive, and we should be considering now how best to mitigate the negative impacts that a fourth industrial revolution may bring.

For as long as there have been technological innovations to ease the burden of physical labour, there have been dire warnings about the impact on jobs. Although the short-term impact of early automation was severe enough to lead to the Luddite riots of the early 1800s, in the main the dire predictions of what people such as John Maynard Keynes termed “technological unemployment” have proved to be unfounded. In the long run, technological innovation has always delivered more employment opportunities to the economy than it has taken away, but these processes have created winners as well as losers in the short term.

I for one am not prepared to take a chance that things will sort themselves out in 30 or 40 years. Unlike previous waves of industrial progress, this new wave of automation threatens jobs across the entire spectrum at a pace that is unprecedented and may well be impossible to keep up with. Studies by analysts such as Deloitte have predicted that 2.1 million jobs in wholesale and retail have a high chance of being automated in the next 20 years, and another 1.5 million jobs could be replaced in transport and storage in the same period. These sectors have seen considerable growth in the past few decades, but that now looks as though it could be dramatically reversed.

These predictions refer to the next 20 years, but change in some sectors will happen more quickly. For some, it has started already. There are plenty of examples, as we have heard in the debate today. We have also heard about trials by companies where the movement of all goods in a warehouse is performed by robots. We hear of driverless cars and of drones making deliveries, and in supermarkets the number of automated checkouts continues to increase.

[Tom Tugendhat]

The hon. Gentleman’s points are well made, but does he recognise that automation has lowered costs, which for so many of our constituents has been a blessing? The cost of television sets, food and any number of items in the home has dropped dramatically, meaning that people can enjoy so many more benefits of modern living than would have been possible even 50 years ago.

[Justin Madders]

Of course automation has increased people’s ability to purchase high-spec goods and has led to higher living standards and greater comfort, but we have to remember that to buy those goods, people need an income. That is where my concerns lie.

Not only are jobs at risk in retail and logistics, but the professions are in trouble as well. A raft of new legal tools has been launched which automate functions that were once the preserve of clerks and paralegals. Further analysis by Deloitte has shown that the UK has already lost 31,000 jobs in the legal sector to automation, with a further 114,000 jobs set to go in the next 20 years. One futurist predicts that accountancy and law will go from being respectable, well-paid professions to barely existing in a generation. Although many will no doubt view a reduction in the number of lawyers as a good thing, it is difficult to see how there will be anything other than a loss of skilled professional jobs over the coming decades, which will limit opportunity for future generations.

This is in line with some economists’ predictions of an increasing polarisation in the job market, with the gap between high-skilled and high-wage jobs and everyone else continuing to grow. This is a trend that we are already seeing, and it is likely to accelerate as a result of automation and the development of artificial intelligence. Now that we have a pretty good idea of what is coming down the track, it is time for an honest appraisal of whether enough new opportunities can be created to bridge what could be a gaping chasm in the job market, and how we prepare our children for what will be a markedly different economy from that of today.

These are questions that need to be answered sooner rather than later if we are to avoid unemployment rates that would make the 1980s seem like a golden age. I am sure some will say that that is a rather dramatic statement, but I fear that unless we start to ask ourselves some fundamental questions about how we organise our society, we risk the creation of an unbalanced and unsustainable economy where the majority will face a struggle just to survive, and the insecurity that many feel today will become chronic.

The rise in zero-hours contracts, which we have heard about again today, is another example of the increasing casualisation and disposability of the workforce. What about pensions? How will people save for their old age if the insecurity of their whole working life is such that they cannot be sure they will earn enough to put food on the table each week? Not having the certainty or sufficiency of income to enable people to plan for the future is only storing up problems for us all in the long term. I agree with my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) who said that there need to be clear regional strategies for investment if we are not to risk an unequal distribution of revolution and investment in our industries.

There are many ways these challenges could be tackled. In many ways, the availability of technology has already allowed us to change the way we work. We have seen a seeping of family life into work activity—the blurring of the lines between home and work life has already occurred. That could be a positive development, allowing people to work more flexibly, although there is a tendency at the moment for it to become a more convenient way of extending the working week. We are also going to see an increase in the flexibility of employment arrangements, as well as flexibility in the way we actually work. That will not necessarily be a good thing; it can lead to more exploitation, and I want this place to be challenging that exploitation now, rather than years down the line. A good start would be for the Government to start looking at implementing the Deane review on self-employment.

There are many ways we can look at this issue. A universal income has been talked about. We can reduce the number of working hours. We can change the way we view the world of work. This should be seen as a great opportunity to liberate people from their workplaces. Doing more of the same is not the way ahead for this country. I know that politicians tend to think in terms of four and five-year cycles, but if we can look beyond that, articulate a vision of what a fair and prosperous society would look like and then actually deliver that, we will have shown leadership that our country will benefit from for decades come.