November Budget: "Get AI wrong and the Treasury will engineer its own fiscal collapse"

"fiscal collapse engineered by the Treasury itself."

"Both the OECD and the Institute for Fiscal Studies have shown that companies get significant tax breaks for automation equipment while paying heavy National Insurance on human workers,"

"We've built a system that financially punishes employment and rewards replacement. That's not innovation policy - that's fiscal self-harm."

"If the Government fails to act, they won't just create an unstable society. Get AI wrong, and the Treasury will engineer its own fiscal collapse."

UK government revenues depend heavily on income tax and National Insurance Contributions, which together account for over 40% of receipts. Rapid automation across customer service, accountancy, law and software engineering threatens to shrink the workforce and reduce income-based tax revenue. Current tax incentives favor investment in automation equipment while imposing high National Insurance costs on human employment, creating a financial incentive to replace workers. Without redesigning the tax model to capture AI-driven wealth and reward businesses that augment rather than replace labour, the fiscal position faces severe structural risk and potential collapse.

Read at Business Matters