Labour MP Liam Byrne has called for the creation of a new National AI Dividend Fund, arguing that Britain must embrace artificial intelligence while ensuring the wealth generated by the technology is shared more widely across society.
Writing in a new Substack article, Byrne warns against allowing growing opposition to data centres and artificial intelligence to develop into a wider “tech-lash” similar to that emerging in parts of the United States.
He argues that Britain cannot afford to turn its back on AI given the country’s longstanding productivity challenge and the potentially significant economic gains offered by the technology.
The Birmingham Hodge Hill and Solihull North MP points to IMF research showing that Britain’s labour productivity level is now around 20% below that of the United States, compared with roughly 10% in the early 2000s. Separate IMF analysis published this summer estimates that AI could increase UK total factor productivity by between 0.1% and 0.5% a year in the medium term.
But Byrne argues that winning public consent for the AI revolution will be crucial.
New research from King’s College London found widespread concern about the impact of the technology on employment and the distribution of its economic benefits. Some 69% of workers surveyed said they were worried about the economic consequences of AI-related job losses, while 65% of the public believed the gains from AI would mainly flow to wealthy investors and large companies. Just 7% believed those benefits would be shared fairly across society.
Byrne said this lack of trust risks slowing the adoption of AI by British businesses and workers.
He wrote:
“Workers need to experiment with it, adapt it and use it to change how work gets done. If people believe the bargain is simply that they take the risk while somebody else takes the reward, resistance is predictable.”
A new Social Contract for the Hyperscalers
Byrne proposes what he describes as a new “Social Contract for the Hyperscalers”, centred on a permanent public wealth fund that would capture part of the value created when government resources help enable the growth of the AI economy.
He argues that the state is already providing substantial support through infrastructure and grid connections, planning decisions, publicly supported computing capacity and research, British Business Bank investment, government technology procurement and access to valuable public datasets.
Under his proposal, the public should receive a return where those resources help create significant private value.
Byrne sets out a series of principles, including recovering costs where taxpayers incur them, properly pricing scarce public assets and retaining royalties or stakes where public knowledge and infrastructure contribute to commercial success.
He also argues that where the taxpayer assumes “equity-like risks”, government should seek “equity-like returns”, while extraordinary economic rents should be taxed without discouraging productive investment.
The proceeds — potentially including revenues, shares, warrants and royalties — would be accumulated in a National AI Dividend Fund.
Byrne suggests that over time the fund could operate on principles similar to Norway’s sovereign wealth fund, investing proceeds and creating a permanent national asset rather than spending the windfall immediately.
Returns could ultimately be used to provide universal savings accounts for young people, initially helping with retraining but potentially extending to education, starting a business or contributing towards a first-home deposit.
He said the ambition should be to move towards “universal capital and a new wealth-owning democracy for the AI age.”
Warning against repeating North Sea oil mistake
Byrne draws a comparison with Britain’s handling of North Sea oil revenues, arguing that the country missed an historic opportunity by failing to turn a larger proportion of those receipts into permanent national wealth.
Norway instead accumulated petroleum revenues through its sovereign wealth fund, now one of the largest investment funds in the world.
Byrne said Britain should avoid repeating that experience as AI creates a potentially new generation of highly valuable companies, infrastructure and intellectual property.
He wrote:
“Britain made a historic mistake when it gave away much of the North Sea oil windfall as tax cuts instead of converting it into permanent national wealth like the canny Norwegians.
“We should not make the same mistake twice.”
The intervention comes as the Government seeks to accelerate AI adoption and investment while addressing questions over energy demand, data-centre development, jobs and the distribution of the technology’s economic rewards.
IMF researchers have concluded that Britain is comparatively well placed to benefit from AI because of its concentration of highly skilled, knowledge-intensive industries, but warned that infrastructure, skills, regulation and investment will be critical to realising those gains.
Byrne’s proposal seeks to add another element to that debate: ensuring that if public investment helps build Britain’s AI economy, the public receives a lasting financial stake in its success.
