The United Kingdom needs more robots, so imposing a tax on them would not be in the interests of U.K. businesses or workers, lawmakers said in a new report on automation and the future of work.
In its September 18 report, the House of Commons Business, Energy and Industrial Strategy Committee found that the United Kingdom is lagging behind the other G-7 countries when it comes to automation and risks being left behind completely unless the government acts.
The problem is not that the United Kingdom has too many robots, but that it has too few, according to the report, which noted that in 2015, the country had only 10 robots per million work hours, compared with 167 in Japan. The United Kingdom had led the way during the first Industrial Revolution because of its embrace of new technologies, but that leadership is waning, the report says.
“The risk we face is not a robot takeover of our workplaces, but that our lack of adoption and the reluctance of businesses and the government to lead the way in the fourth Industrial Revolution means other countries will seize the initiative and take the advantage of new technologies, not least the growth and jobs they bring, while we are left behind,” the report adds.
The report acknowledges concern about robots replacing human workers and noted that the committee had asked for evidence showing how imposing a robot tax could offset that concern. However, written and oral evidence from witnesses did not support such a tax because of the United Kingdom’s low robot adoption rate, according to the report.
In his evidence to the committee, Andrew Stephenson, minister for business and industry at the Department for Business, Energy and Industrial Strategy “indicated that the government too found the idea of a robot tax in [the] current automation environment as ‘perverse,’” the report says.
“We need more robots and not fewer. A tax on them would further discourage take up. We do not believe that a tax on robots is in the interest of businesses or workers in the U.K.,” lawmakers wrote.
Instead of a robot tax, witnesses including Stephenson expressed support for automation incentives to encourage companies to invest in advanced technologies. The government has touted research and development tax credits and capital allowances as a way to stimulate automation, but companies such as Siemens have criticized the incentives as being too broad to specifically target innovation, according to the report.
The committee took some inspiration from Japan, a leader among G-7 countries in automation thanks to such initiatives as its new robot strategy. “Key to this incentivization was a tax credit system that directly rewarded investment in robotics, stimulating demand for products,” the report says.
Japan’s move to boost robot adoption should serve as a warning to the United Kingdom, lawmakers said, adding that the U.K. tax credits and allowances may be blunt instruments that don’t encourage specific types of investment that would stimulate business productivity.
“We recommend that the government brings forward proposals in the next budget for a new tax incentive designed to encourage investment in new technology, such as automation and robotics,” the report says. Doing so would not only benefit businesses but the economy at large, the report adds.
The stakes are high for the United Kingdom, despite its potential, according to Rachel Reeves, the committee's chair. “The fact is that we are lagging behind our international competitors in our adoption of robot and automation technologies,” Reeves said in a statement. “Productivity, economic growth, and ultimately job creation and higher earnings, will flow to those countries that capitalize on these technologies.”