‘Don’t tax humans more than AI machines’, progressive coalition tells Chancellor
- 2 days ago
- 5 min read
Updated: 1 day ago
Trade unions and civil society organisations sign open letter to Chancellor Rachel Reeves
Groups warn government is "not thinking big enough" as AI threatens to further shift wealth from workers to capital
Letter calls for capital gains tax to be increased in line with any shift of income from labour to capital, to prevent AI making machines cheaper than people
Intervention marks a step-change in how progressive organisations are engaging with the topic of AI.
A coalition of trade unions and progressive organisations have today written to the Chancellor calling on the government to increase capital gains tax — warning that without urgent action, the AI revolution risks repeating the economic devastation of deindustrialisation.
The open letter, coordinated by The New Contract, a new pro-worker AI campaign organisation launched today, is signed by nearly 40 civil society organisations and trade unions and is released following the Chancellor's recent announcement of a new AI Economics Institute.
It marks the first time the progressive and trade union movement have come together to speak out in warning over some of the changes AI is likely to bring to society, and calls for the government to take a more active role in shaping the transition. The letter demands it explore a wide range of policy solutions including taxation policy, welfare and retraining, AI workplace regulation, and the industrial strategy needed to ensure any AI gains can be shared across the UK.
In particular, the letter says the government must act now on capital gains tax, which they argue, is an urgent first step to ensure that businesses do not have incentive to use AI to simply automate human roles.
Former Prime Minister Rishi Sunak recently made the case that changes to the tax system would be needed to cope with falling income from labour.5
The full letter and signatories can be found below.
Trade unions — including GMB, NASUWT, NEU, UCU, PCS
Civil society organisations and think tanks — including IPPR and Common Wealth
Leading academics and researchers
Highlighting the risk of an unmanaged AI transition, the letter warns:
“In this country, we saw what happened when technological change ravaged unprotected communities through deindustrialisation. Not supporting those communities was a political choice.”
Tom Darling, Founder and Executive Director of The New Contract, said:
"It’s great to see the progressive and trade union movement get serious about generative AI - this technological revolution threatens to upend our society. I am pleased to be founding The New Contract to be making the case for a progressive vision of our AI futures.”
“We cannot allow this debate to be shaped only by Big Tech lobbyists and other reactionaries. Without an active state informed by a desire to advance progressive values, AI will deepen inequality, concentrate economic power, and leave the UK with less control over our own destiny than we have had for centuries.
“It’s been good to see a debate about our economic model starting in the governing Labour Party but for this to be serious it can’t leave out the AI transition.”
Notes to editors
1. The letter has been coordinated by The New Contract. The full letter and list of signatories can be found below.
2. The AI Economics Institute was announced by the Chancellor to “work with the Future of Work Unit to understand the impact of AI on jobs and productivity”. https://www.gov.uk/government/news/chancellors-growth-plan-sets-key-principles-for-uk-eu-alignment
3. Recent TUC polling found the public overwhelmingly backs equalising capital gains tax with income tax as part of a wealth tax package. https://www.tuc.org.uk/news/public-overwhelmingly-back-wealth-tax-package-fix-public-services-and-rebuild-britain-new-tuc
4. A recent Morgan Stanley study found the UK is losing more jobs than it creates because of AI, including growing evidence of slowdown in entry level jobs. https://www.computing.co.uk/news/2026/ai/ai-driven-job-losses-hitting-uk-harder-than-peers 5. https://www.bbc.co.uk/news/articles/cvg07x4rejdo#:~:text=Sunak%20suggested%20rebalancing%20the%20tax,and%20efficiencies%20in%20deploying%20AI.
About The New Contract:
The New Contract is a progressive advocacy organisation focused on the political economy of AI, campaigning for AI that works for working people.
Media contact:
Tom Darling
07949208626
Letter text and signatories
Dear Chancellor,
You recently announced an AI Economics Institute to “understand the impact of AI on jobs and productivity” in the UK and said that this will “sit alongside further work to ensure workers are properly empowered through the AI revolution.”
Amid the latest energy and cost of living crises, AI adoption is yet another potential crisis barrelling towards us. But we worry that despite this latest announcement, the government is not thinking big enough to meet this moment.
AI has the potential to be a transformative technology, but huge risks lie ahead for working people. In this country, we saw what happened when technological change ravaged unprotected communities through deindustrialisation. Not supporting those communities was a political choice.
Now, the impact of AI on jobs remains unclear, but a growing body of international evidence shows a slowdown in entry-level employment.
Technology is at its best when it supports human beings rather than seeks to totally replace them - but huge incentives exist for companies to simply automate. Many workers are already at risk of being fired by an algorithm and are increasingly subject to surveillance in the workplace.
Tax revenues from work could fall, eroding the heart of our current social contract. Meanwhile, a small number of unaccountable US-headquartered Big Tech companies stand to become some of the wealthiest and most powerful economic actors in history.
The public will have a claim on this extraordinary wealth. But for working people to see any of it, we'll need an industrial strategy to invest in public goods across the AI stack.
We are calling for a significant expansion of the mandate of the AI Economics Institute so that it:
Examines the full range of plausible scenarios for AI adoption and jobs - including more disruptive scenarios
Gives workers, trade unions and other civil society organisations a seat at the table, and has a Chair and CEO that workers can have confidence in
Reports publicly and at pace, so its findings can inform urgent decisions rather than arrive after they have already been made.
Explores the full spectrum of policy responses required, including:
Taxation policy, including reforming capital gains tax in line with any shift of income from labour to capital.
Welfare policy, including what changes to unemployment benefits and retraining programmes may be needed.
AI workplace regulation
Industrial strategy, including what public investment is needed to ensure the gains of AI can be captured and shared in the UK.
This will put the UK in a stronger position to have an AI transition that is managed, fair, worker-led.
Yours,
Tom Darling, Executive Director, The New Contract
Charlotte Brumpton-Childs, Acting National Secretary, GMB
Daniel Kebede, General Secretary, National Education Union, NEU
Matt Wrack, General Secretary, NASUWT - The Teachers’ Union
Sarah Woolley, General Secretary, Bakers, Food and Allied Workers' Union
Jo Grady, General Secretary, University and College Union (UCU)
Gawain Little, General Secretary, General Federation of Trade Unions
Ged Nicholls, General Secretary, Accord
Jim Leonard, General Secretary, Advance Union
Naomi Pohl, General Secretary, Musicians' Union
Brian McDaid, General Secretary, Aegis the Union
John Moloney, Assistant General Secretary, Public and Commercial Service Union
Michael Schwaabe, President, AFA-CWA London
Roa Powell, Senior Research Fellow, IPPR
Eleanor Shearer, Senior Research Fellow, Common Wealth
Will Stronge, Chief Executive, The Autonomy Institute
Matthew McGregor, CEO, 38 Degrees
Faiza Shaheen, Executive Director, Tax Justice UK
Cat Hobbs, Director, We Own It!
Sophie Lucas, Executive Director, Organise
Jim Killock, Executive Director, Open Rights Group
Andrew Speke, Interim Director, High Pay Centre
Conor Nakkan, Senior Researcher, Intergenerational Foundation
Nick Dearden, Director, Global Justice Now
Will Snell, Chief Executive, Fairness Foundation
Dr Daniella Jenkins, Executive Director, Women's Budget Group
Claire Godfrey , Executive Director, Balanced Economy Project
Dr Jeni Tennison, Executive Director, Connected by Data
Rebecca Gowland, Executive Director, Patriotic Millionaires UK
Jo Wittams and Priya Sahni-Nicholas, Co-Executive Directors, The Equality Trust
Clara Maguire, Executive Director, The Citizens
Joe Ryle, Campaign Director , 4 Day Week Foundation
Frieda Lurken, Co-founder, Pull the Plug
Dr Cecilia Rikap, Assoc Prof. in Economics and Head of Research, UCL IIPP
Dr Nick Sricnek, Senior Lecturer in Digital Economy, King's College London
Professor Emeritus Nick Couldry, London School of Economics and Political Science
Professor Mark Graham, Director, Fairwork / University of Oxford Oxford Internet Institute
Professor Emerita Robin Mansell, London School of Economics and Political Science