Labour’s people-first vision for productivity in the age of AI

As artificial intelligence reshapes the workplace, the Labour government is making it clear that technology alone will not drive Britain’s future productivity. Instead, its focus is on people — fair pay, good work, and stronger skills — forming the backbone of a modern, inclusive economy.

Prime Minister Keir Starmer and Business Secretary Jonathan Reynolds have both emphasised that the country’s competitiveness depends not only on innovation but also on ensuring that workers benefit from the digital transition. The message is simple: technology should serve people, not replace them.

Putting people at the heart of productivity

While many headlines focus on automation and efficiency, Labour’s approach centres on human capability. The government’s recent policy announcements — from the launch of the Fair Work Agency to new plans for a national skills partnership — highlight a shift toward a “people-powered” productivity model.

The Fair Work Agency, set to begin operations in 2026, will consolidate several regulatory bodies into one, aiming to simplify labour enforcement and make fair employment practices the norm. This fits with Labour’s broader mission to rebuild trust in the workplace by protecting decent employers and ensuring that work always pays.

According to analysts, this people-first approach also makes economic sense. Research from the OECD and the TUC suggests that improving job security, management quality, and worker training can raise productivity as effectively as investment in automation — and often more sustainably.

Balancing innovation and fairness

Labour’s strategy doesn’t reject technology; it redefines its purpose. The government is backing investment in AI and digital infrastructure but coupling it with initiatives to improve workplace wellbeing and digital skills.
The Department for Business and Trade recently launched consultations on how AI could support rather than displace workers, especially in public services, logistics, and manufacturing.

Business Secretary Jonathan Reynolds said the aim was to “harness innovation while ensuring every worker shares in the benefits.” He added that fair pay, collective bargaining, and skills development would remain “at the core of Britain’s growth strategy.”

A new era of fair growth

For small and medium-sized enterprises — the backbone of the UK economy — the people-first approach could bring long-term stability. SMEs stand to gain from clearer employment rules, better access to training, and technology designed to enhance rather than hollow out their workforce.

In the AI era, Labour’s message is consistent: productivity starts with people. By focusing on fair work, strong skills, and shared prosperity, the government hopes to chart a course toward an economy where innovation and inclusion go hand in hand.