Reeves is betting big on AI, but does the public back her? |
Rachel Reeves is betting the UK’s economic future on an AI-driven productivity surge, but there are serious questions about the plausibility of this bet given the UK’s weaknesses in implementation, scaling capacity, talent retention and public pessimism, says Paul Armstrong
Rachel Reeves has placed an enormous bet on AI rescuing the UK’s dwindling economy. Fraser Nelson argued in the Times that the Chancellor is effectively gambling that AI will trigger a productivity surge strong enough to lift tax receipts, stabilise debt and shift the country out of its long malaise. While many in government speak as if this outcome is inevitable, serious questions remain about what is plausible, what is fantasy and what needs to be confronted now before the gap between ambition and delivery becomes unmanageable.
Momentum inside UK firms is real enough. Almost a quarter of businesses already deploy AI in some form according to the latest ONS survey. The number alone is not a sign of transformation, yet the speed of uptake signals something deeper. AI no longer sits in innovation labs or side projects, it’s moving into everyday workflows in finance, media, logistics, research and operations. Early adopters are already bringing automation into the centre of their processes rather than leaving it at the edges.
Consultants continue to publish optimistic forecasts because the models look promising if adoption becomes systemic. KPMG suggests generative AI could add more than £30bn pounds of productivity to the UK over the medium term. A broader PwC estimate points to far larger gains once AI diffuses across entire value chains. These numbers depend on firms doing the tiny thing of totally redesigning how they operate. Right now they are sprinkling AI on problems rather than seeing if they can solve the........