Labour deputy leader warns over jobs automation 'inequality'

Labour must build a new alliance to ensure the benefits of the growing use of automation across the economy does not lead to greater inequality, the party's deputy leader has warned.

Addressing party activists in Weymouth, Tom Watson said the rise of the digital economy had already led to a greatest proportion of the world's wealth being concentrated in the hands of the smallest number of people than at any time since the 1920s.

He warned that the automation of increasing numbers of jobs over the coming decades would simply exacerbate that trend unless governments intervened.

"We need government, workers, employers and enlightened entrepreneurs to work in partnership to ensure everyone gains from the benefits these changes will bring," he said.

"Our challenge in the next decades of automation will be to work out how we continue to grow our economy but ensure that the value created and time saved by automated systems is shared more fairly, and not used to further enrich an already wealthy and powerful elite."

He said the big technology companies had already taken out large numbers of jobs and, while the benefits to consumers had been enormous, the "social dividend" had not been as great as it should be with little investment in social infrastructure, education, skills and health.

"Uber, Facebook, Google and the other successful tech platforms have brought immense gains to the lives of millions of people, but they are part of an emerging 'winner takes all' economy," he said.

"The forces of globalisation and automation are leaving our society's labour market looking increasingly like an hourglass, with room at the top for those with existing wealth or access to capital and a widening base of lower-paid jobs that cannot be automated. And a hollowing-out in the middle - the jobs in retail or high street banking, for example.

"Do we really want a society of affluent leaders, struggling workers with little room in the middle and fewer chances for movement?"

At the same time, however, he argued that the changes offered an opportunity for Labour as the one party capable of ensuring the benefits would fairly distributed.

"That's why, despite these powerful forces bearing down on us, and all the media attacks, I am optimistic for our party," he said.

"History shows that only the Labour Party can bring people through these difficult times, because only the Labour Party believes in harnessing the power of the enabling state.

"In the world of Sajid Javid and George Osborne, government is an impediment to market perfection. Their ideology dictates that the market alone must decide who wins and who loses.

"That is not the Labour way. We are all here because we believe that work should be rewarded."