Does Rachel Reeves know anything about AI?

Like Harold Wilson and his ‘white heat of technology’, Rachel Reeves is presumably hoping that blathering on about AI and quantum computing in her Mais lecture today is going to make her sound modern and positive. Yes, of course artificial intelligence is the ‘defining technology of our era’ – we don’t need the Chancellor of the Exchequer to tell us that. I am sure that £2.5 billion of public money will be useful, but then there isn’t exactly a shortage of private capital being hosed on AI at the moment, so the need for public money isn’t clear; lower taxes and less onerous employment legislation might be more favourable.

But if the government is so keen on using AI to transform the UK economy, here is just one little tricky question: why is the number of civil servants still going up? Last year, the Prime Minister told us that AI was going to work marvels on lousy public sector productivity. It was even going to help fill our potholes, if you remember. And the result? Not much sign of an army of AI bots pouring the hot bitumen just yet. But in the meantime, the number of staff being employed by the state to do administrative tasks – what should be meat and drink for AI – increased by another 5,410, or one per cent, in the year to September.

I wonder whether Reeves or Starmer really have much of an idea about AI at all? Or whether they are simply using a funky-sounding technology to distract from the fact that Britain is rapidly losing its older, less sexy industries like chemicals, oil, gas, steel-making and manufacturing thanks to an energy and climate policy which is driving them to extinction.

While Reeves was delivering her lecture, Peter Huntsman, the American owner of one of Britain’s last chemical works, based on Teesside, was on Radio 4. He repeated his threat to close down the works unless the government works to lower punitive energy prices, which he says are now six or seven times those in the US.

The interviewer seemed to want him to blame it all on Donald Trump, but Huntsman was having none of it. The culprit, he made clear, was an energy policy which is based too much on intermittent renewables and which voluntarily leaves fossil fuels – a vital raw material in the chemicals industry as well as a source of fuel – in the ground.

Reeves doesn’t want us to realise this; she just wants us to think that chemicals and fossil fuels are old hat while AI is the future. There is, however, a big hole in her thinking. What is vital for chemicals – cheap and reliable energy – is also vital for AI, which is a voracious consumer of electricity.

The way things are going, we are going to have neither a chemicals industry nor an AI one. But all is not lost: for young people in search of a career there are still plenty of jobs in public administration, even if it is far from clear who is going to be paying their wages.