George Osborne is expected to announce in his budget next week that driverless lorries will be tested on UK roads. By doing so he will herald the arrival of a new era of automation that will have a dramatic effect on the job prospects of many millions of British workers.

The Bank of America recently claimed that automated systems will be doing nearly half of all manufacturing jobs within a generation – saving an astonishing $9tn in labour costs. The effects of this technological shift will be as profound and far-reaching as those of the first industrial revolution.

Shadow first secretary of state Angela Eagle will frame my party’s response to the huge social and economic upheavals that these developments will usher in, and I believe that a new industrial strategy should be at the heart of that response. If ever there was a time for a politics underpinned by notions of the empowering state it is now.

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The question facing us as a nation is how do we make technological change our ally not our foe? We can’t leave it to fate, as the current chancellor and his colleagues at the Department for Business are doing. Too many senior Tories think they are powerless to act – they wrap their powerlessness up in economic and political libertarianism, and pray to the gods of the free market. They eschew any role for government, and reject most notions of an industrial strategy.

Deloitte, the consultancy firm, has claimed that automation, though a net benefit to the UK economy, has removed 800,000 jobs since 2001, and that up to 11m UK jobs have a high chance of being automated within the next decade. Never have we seen such a change in the landscape of the labour market. I believe the potential consequences to be so great that we should regard automation as the most urgent issue facing the country. So why isn’t the government addressing it?

There is no minister for this new technology. No special cabinet committee has been set up to come up with solutions. There is no royal commission to look at the economic impact robots will have, or the ethical dilemmas they will pose. Where is the new institution that brings together trades unions, employers and government to establish how the time liberated and wealth created by robots is equitably shared?

A robot driving a lorry may sound daunting, just as a horseless carriage did in 1890. But a driverless car doesn’t get tired, or drink alcohol, or have blind spots. The policy implications posed by just this one technology are almost infinite. Road deaths should plummet. It will lead to greater efficiency in our existing road networks as cars become personal trains, driving faster and closer together on our motorways; there will be huge improvements to freight delivery times and increased competition with the rail sector. But it will also mean a massive displacement of jobs in the transportation industry.

We need only look at the past to understand the scale of the change to come. The first machine age unleashed the stunning power of capitalism and changed society forever. Our towns and cities are shaped by the industrial revolution. It brought us the railways, which were fiercely resisted by rural communities and powerful landowners. It built our great cities, with their town halls, libraries, galleries, museums, public statues and great squares.

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This wave of industrialisation created great wealth, great philanthropy and great advances in the human condition. But it also created huge upheaval and vast misery: child labour; infectious disease; industrial injury; fetid slums; and infant mortality. It took an amalgam of municipal leadership, benevolent capitalism and the collective strength of workers to civilise this new economic landscape. But there were huge changes to the lives of millions. At one point more British soldiers were being deployed to deal with the Luddites who smashed the new machinery than to fight Napoleon.

Today, sensors and actuators, together with advances in computation, memory and communication capability, are making every product smarter. The results will be positive for the vast mass of the global population, bringing knowledge, connections and consumer choice to billions. But they will be challenging for the millions in jobs that won’t exist in a decade.

We already have an hourglass economy, with plenty of room at the top for those with existing wealth and access to capital, and a wide, flat base of lower-paid jobs that cannot be automated. There is a hollowing out of the middle – the jobs in retail, or high street banking for example. We are becoming a country of affluent leaders, and struggling workers, with less space in the middle and fewer chances for progression.

New technology will exacerbate this trend. Unlike previous waves of industrial progress, it is not just working-class jobs, primarily done with the hands, that automation threatens. Automated systems are diagnosing diseases, writing annual reports, researching criminal cases in court, designing software and pouring our coffee.

Richard and Daniel Susskind, in their remarkable work The Future of the Professions, argue that it is jobs in medicine, law, accountancy and engineering that will bear the initial impact of the rise of the machines. Why will we need a GP, when a robot can read our complex physiologies and prescribe, manufacture and distribute the exact blends of medications we need?

If Deloitte is right, nearly a third of UK jobs are facing eradication within a decade

The government isn’t ideologically equipped to address the challenges we will face in this new world. Enterprise and hard work grow businesses that become employers, and contribute to the fabric of society in many ways, social and cultural, as well as through taxation. But just as the great capitalists of the last industrial revolution realised they needed to build homes and provide healthcare for their workers, the business owners of the future will have to adapt to a world where productivity is dramatically improved through automation. If Deloitte is right, nearly a third of UK jobs are facing eradication within a decade.

It is 20 years since Tony Blair said that under Labour “every school would be connected to the information superhighway”. It sounded like science fiction. But today, my 10-year-old has access to more information in his pocket than the president of the United States had 20 years ago, standing in the White House situation room.

When Blair delivered those words we couldn’t begin to imagine the impact of the internet. Yet the golden age of the knowledge economy has not yielded all that it promised. The success of big tech platforms like Google, Amazon and Facebook has seen huge amounts of cash accrue to their balance sheets, but very little investment in social infrastructure, education, skills and health. The situation is worsened by the apparent inability of government to tax these tech giants.

The Labour party will be at the forefront of developing a new industrial strategy, fit for the second machine age and the epoch of drones, bots and artificial intelligence. This new industrial strategy must address head-on the hourglass economy, the future of the professions, the skills gap, the need to spread prosperity not concentrate it in fewer hands, and the threats as well as the potential of change. None of that will be easy, but all of it is necessary if the UK is to claim its share of the benefits that automation will bring.