One to watch for in next week's Budget and associated forecasts is the suggested impact of AI on employment rates in the UK.
The FT has reported this morning that:
Law firm Clifford Chance is cutting about 10 per cent of its business services staff in London, pointing to increased use of artificial intelligence as one reason for the job losses.
They added:
Roughly 550 employees, in areas including finance, HR and IT, were told last month about plans to make some 50 jobs redundant and to bring in role changes for up to 35 others.
And to contextualise this, they added:
The elite firm, where partners earned an average of £2.1mn in the past financial year, told staff that greater use of AI and reduced demand for some business services meant that it needed to cut jobs.
Let's be clear: we always knew law was an area where AI would have a significant impact, and I suspect many firms will be doing what Clifford Chance is. Other sectors will not be hit as badly. But to ignore this issue would be reckless on Rachel Reeves' part. But will she really address it? I am not betting on it.
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Two thoughts spring to mind
I remember when I started work, almost all records were paper and there were huge numbers of staff employed dealing with it.
Thats all gone now and all documents are held electronically BUT its a process that took over twenty years
Secondly I am reminded of Admiral Fisher, I was looking at two of Drachinifels documentaries about him last night. He went to sea on a ship basically the same as HMS Victory but went on to build HMS Dreadnought and served on the committee developing ASDIC.
He was a technophile and recognised the potential of the Submarine and the Diesel Engine BUT it took a long time before the full potential of both these technologies were to be fully developed.
Might I suggest that we are in a similar situation to the one he was in just before WW1 there are new technologies out there, in this case AI BUT there is a way to go yet before they are working at their full potential (Air blast fuel injection anybody?) so I might be a bit more cautious.
Thanks
The consequences of AI will be felt in the next Budget rather than this one. That will be when Reeves or her successor have to find the money to pay Universal Credit to everyone who lost their job to a LLM.
The same AI that’s decimated the work staff at HMRC. Unless you are an accountant, it’s practically impossible to call them anymore and actually talk to a human. A merry-go-round of ineffectual messaging that doesn’t provide answers.