Lloyds Banking Group has set aside a further £800m to cover estimated costs associated with the car finance mis-selling scandal.

The bank said the sum took its total provision to £1.95bn.

It had been assessing the impact since the Financial Conduct Authority (FCA) revealed last week it was consulting on a compensation scheme, with up to 14.2 million car finance agreements potentially eligible for payouts.

The regulator had previously found that many lenders failed to disclose commission paid to brokers, which could have led to customers paying more than they should have between April 2007 and November 2024.

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Eligible customers could receive an average of £700 each under the proposals.

Lloyds said on Monday that it would be contributing to the consultation to argue a number of points.

It said: “The Group remains committed to ensuring customers receive appropriate redress where they suffered loss, however the Group does not believe that the proposed redress methodology outlined in the consultation document reflects the actual loss to the customer. Nor does it meet the objective of ensuring that consumers are compensated proportionately and reasonably where harm has been demonstrated.

“In addition, the approach to unfairness in the redress scheme does not align with the legal clarity provided by the recent Supreme Court judgment in Johnson, in which unfairness was assessed on a fact specific basis and against a non-exhaustive list of multiple factors. The Group will make representations to the FCA accordingly.”

Shares in Lloyds, which fell last week when the bank warned of a potential “material” increase in its provisions, gained more than 0.5% on Monday.

The estimated compensation figure came in below the sum some financial analysts had predicted.

The shares remain more 50% up in the year to date.

Another listed lender exposed to car loan mis-selling is also expected to raise the amount it has set aside.

Close Brothers, which has a £165m provision currently, saw its shares tumble 7% when it admitted an increase was likely once its analysis of the compensation consultation documents was completed.

Car finance makes up approximately a quarter of its total loan book.

The budget may still be more than six weeks away, but rumours of U-turns and changes are already in full swing.

Over the last few days, there have been multiple reports that those inside Whitehall are considering tweaks to the controversial inheritance tax (IHT) reforms on farms announced this time last year.

Plans to introduce a 20% tax on estates worth more than £1m drew tens of thousands to protest in London, many fearing huge tax bills that would force small farms to sell up for good.

Now there are reports the tax threshold could be increased from £1m to £5m (£10m for a married couple) – a shift that would remove smaller farms from being liable to pay.

Senior figures in farming have long believed a rise could be the solution to save the smaller farms and it would satisfy most.

However under the proposals, the 50% relief on IHT would be removed for farms above the new threshold.

That means bigger farms, responsible for producing a large amount of produce in our supermarkets, could bear the brunt of the tax burden with the Treasury potentially increasing revenues.

Two senior farming figures told me today that while a threshold increase is welcome, it does nothing to solve an “insolvable” problem.

Read more: What’s the beef with farmers’ inheritance tax?

Big farms have more land to sell, but then they become smaller farms and either produce less, or even divide up, to avoid the tax entirely.

Richard Cornock runs a small dairy farm in south Gloucestershire, which has been in his family since 1822.

He hopes to pass it on to his son Harry, who is now 14 and training to become a farm manager.

“I’ve been under so much stress like most farmers worrying about this tax,” he said. “And I really hope they do push the boundaries on the thresholds, because the million pounds they propose at the moment is ridiculous.

“It’s been on my mind the whole time to be honest. I even looked into getting life insurance to insure my life and I can’t get it because I had a heart condition. And that was one way I thought I might be able to cover my kids…”

We paused our chat as he was too upset to continue – an illustration of the stress farmers like him have been under over the last 12 months.

The government says it won’t comment on “speculation” about any possible changes, but it has previously defended the IHT reform, saying most estates would not pay and that those who will be liable can spread payments over a decade.

Labour is under pressure to do something to appease the angry farmers, a rural vote that turned from the Conservatives at the last election.

I ask Richard whether any tweak or row back on IHT will restore faith in Labour?

“The damage has been done,” he says.

AI has stolen £120,000 from Joe Turner.

The 38-year-old writer lost 70% of his clients to chatbots in two years.

His is one of 40 job roles that AI is fast replacing, according to conversations the Money team had with industry experts, researchers, and affected workers.

Read all the latest Money news here

“It’s a betrayal,” says Turner, who earned six figures as a freelancer before the rise of generative AI.

“You’ve put your heart and soul into it for so long, and then you get replaced by a machine.”

He adds: “You always think ‘it’s never going to happen to me’.”

Around 85% of the tasks involved in Turner’s job could be performed by AI, according to research published by Microsoft in July that has gone largely unnoticed.

The tech giant’s analysis of 200,000 conversations with its Co-Pilot chatbot concluded it could complete at least 90% of the work carried out by historians and coders, 80% of salespeople and journalists, and 75% of DJs and data scientists.

Also in the top 40 most exposed jobs were customer service assistants (72%), financial advisers (69%) and product promoters (62%). Search the table below to see how your role fares…

Speaking to the Money team, senior Microsoft researcher Kiran Tomlinson insists the study “explores which job categories can productively use AI chatbots, not take away or replace jobs”.

Turner for one doesn’t buy this. “That’s what they want to market it as,” he says.

Experts we spoke with were just as sceptical of Microsoft’s optimism.

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‘Replaced entirely by the tool’

“If you were to look at these jobs in three to five years, there’s a very good chance they’ve been replaced entirely,” says an AI consultant with more than a decade of experience deploying the tech in nearly 40 companies.

“Except in areas where they are either relationship-driven or very judgmental,” they add, speaking on condition of anonymity due to their commercial relationships with a range of SMEs, multibillion-pound funds and public bodies.

“These types of jobs are by nature most likely to be replaced entirely by the tool,” agrees AI researcher Xinrong Zhu, an assistant professor at Imperial College London.

“We’re living in a world where we’re witnessing a very important turning point.”

It’s a verdict echoing job cuts announced by major companies over the summer.

Buy now, pay later firm Klarna shrunk its headcount by 40% due to investments in AI and a hiring freeze, while boasting its chatbot was doing the work of 700 employees.

Microsoft itself said it was laying off 15,000 employees while investing £69bn in data centres to train AI models and reportedly using AI to save $500m in its call centres.

Amazon chief executive Andy Jassy said he expected to “reduce our total corporate workforce as we get efficiency gains from using AI extensively”.

But don’t take this at face value, says the AI consultant. Just because AI will take jobs doesn’t mean it can right now: “I wouldn’t say AI is in a position that you can then generate layoffs immediately: What you tend to see in most businesses is hiring freezes.”

The UK hasn’t had a sharp decline in postings for the jobs most threatened by AI, but they grew four times slower than the least threatened jobs between 2019 and 2024, according to PwC’s AI jobs barometer.

“AI is being used as an excuse,” the consultant says.

“There’s a load of macroeconomic effects that are actually causing [job cuts].”

It’s the Money blog’s usual suspects: Increases to employer national insurance, the cost of hiring and the cost of energy – not an AI takeover.

But, they say, “that’s not to say it won’t happen next year.”

Some 78% of global businesses anticipate increasing their overall AI spending this fiscal year, a Deloitte survey found.

Approximately 40% of employers expect to reduce their workforce where AI can automate tasks, according to a World Economic Forum survey.

An email that changed everything

Freelancers may, then, be the canary in the coal mine.

Demand for gigs related to writing and coding fell by 21% within eight months of the release of ChatGPT, according to a study conducted last year by Zhu.

“The magnitude really surprised us,” she says.

It wouldn’t have surprised Turner.

A few months earlier, in December 2023, he received an email from a website where he’d worked for a decade.

“Do you ever use AI?” it read. “No,” he replied.

That was the last time he heard from them. Overnight, £30,000 was wiped from his annual income.

“I went on their website and I realised they had started using AI instead of me,” he says.

One by one, most of his other clients followed suit.

“It was just a complete desert,” he says of the job landscape.

If you listen to the heads of some leading AI companies, you’d be forgiven for thinking this desert is just one apocalyptic vista at the end of the working world as we know it.

Dario Amodei, chief executive of Anthropic, has warned AI could “wipe out half of all entry-level white-collar jobs”, while OpenAI boss Sam Altman said entire job categories would be “totally, totally gone”.

“They want to glorify the models,” says Dr Fabian Stephany, a Labour economist at the University of Oxford and fellow at Microsoft’s independent AI Economy Institute.

Impersonating a big tech boss, he continues: “‘Oh wow, look, if we can automate away 50,000 people, then that technology must be really tremendous – so you should be investing in our company!’

“I would advocate to have a bit of more of a cooled down, pragmatic approach.

“Think about it as a technology and look at how technology has been interacting with the labour market in the past.”

Inventions that revolutionised the workplace

Take Richard Arkwright’s invention of the Spinning Jenny in 1769, which churned out huge quantities of yarn to make cloth in some of the first factories at the start of the industrial revolution.

While putting home weavers out of a job, it increased the need for mill workers hundreds of times over, says Stephany.

Henry Ford’s invention of the assembly line in 1913 had a similar impact when it reduced the time taken to make a car from 12.5 hours to 1.5 hours.

Speed lowered production costs and forecourt prices, increasing demand, sales and the number of staff hired to fulfil them.

For the same reason, the invention of the ATM in 1967 led to more bank teller jobs despite automating one of their key functions – something Microsoft was keen to point out.

“Our research shows that AI supports many tasks, particularly those involving research, writing and communication, but does not indicate it can fully perform any single occupation,” Microsoft’s Tomlinson says.

Indeed, the study shows 40 jobs where AI can perform just 10% or fewer tasks.

Tradespeople feature heavily, like painter-decorators (4%), cleaners (3%) and roofers (2%).

Surgical assistants (3%), ship engineers (5%) and nursing assistants (7%) also make the list.

But history also includes a list of the losers of technological innovation.

Replacing horses with tractors wiped 3.4 billion man hours from American farmwork annually by 1960, according to research by economic historian Professor Alan Olmstead.

Spare a thought, too, for the pinsetters once responsible for stacking bowling alleys, who were more or less eliminated by the Automatic Pinspotter unveiled in 1946.

Quantity does not mean quality, either: Arkwright’s millers faced exhausting and repetitive 13-hour shifts in extreme noise, heat and dust.

How fulfilling would working with an AI be?

“Sterile and just not interesting, uniform and bleak and surface-level and hollow” is how Turner described its work after trying AI at the request of a client.

“Cars were a solution – a car was a horse that never got tired. But if you look at AI the same way, it’s basically saying: ‘There aren’t enough rubbish books out there, we need to make more.'”

More human work, not less?

That’s not what it’s for, though, says the AI consultant.

“I don’t see an AI right now coming up with wonderful ideas for creative writing authors,” they say.

But what it’s good at is taking an author’s idea and making a first draft extremely quickly, they explain.

“Now, does that mean we have fewer authors or does that mean we have more?”

The consultant’s optimism comes from seeing AI create extra human work at some of the companies that hired them.

A landscaping firm used ChatGPT to generate personalised services to upsell to existing customers.

At a pension provider with 350,000 scheme members, AI saved “literally thousands of hours” by scanning millions of notes, PDF documents and email chains for spousal support agreements.

That might seem like work stolen from a law firm at first glance, but it likely wouldn’t have been undertaken at all without AI due to the extreme cost of manual labour, says the consultant.

The cost of starting a digital business has also shrunk dramatically, he adds, if you use AI to organise a website, workflow, marketing and employment contracts.

“You end up in a world where you could have thousands more small start-ups because the cost of failure is so much lower.”

The ‘losers of technological change’

Such a positive attitude would do little to convince veteran audio producer Christian Allen, who has lost gigs worth £7,000 to AI in the past year.

“Hasn’t anyone seen Terminator, for Christ’s sake?” says Allen, 53, whose work over the past two decades has been played on major radio stations like Classic FM and Heart FM.

“I think it could very easily take over.”

AI started by depleting requests for voiceovers in company training videos, but Allen recently lost a potential radio client who instead bought the first AI advert he’s ever heard that’s good enough for broadcast.

“It was scarily good,” says Allen, who lives near Birmingham. “No one would know.”

The cost to the client? £11.99. Voice actors would expect £1,000.

“There’s no way anybody can compete.”

Shifting sands forming another job desert?

Not according to Oxford’s Labour economist Fabian Stephany, who was keen to “challenge the dystopian narrative”.

“It is very rare for a new technology to completely replace an entire profession,” says Stephany.

The only exceptions are jobs defined by a single task without any complexity, like bowling alley pinsetters or the translators at the top of Microsoft’s table, he says.

There’s complexity in Allen’s job, like creating video and TV soundtracks and mixing audio, but he’s still nervous.

“The AI subscription can mix for you too, so that’s production houses everywhere – we’re no longer needed. That’s quite scary.”

He adds: “I won’t be doing this in 10 years’ time.”

Microsoft researcher Kiran Tomlinson says AI “may prove to be a useful tool for many occupations” and “the right balance lies in finding how to use the technology in a way that leverages its abilities while complementing human strengths and accounting for people’s preferences”.

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Alexa, tell me what the government is doing

In January, Sir Keir Starmer said there was “barely an aspect of our society that will remain untouched” by AI in the coming years.

The technology is mentioned at least 126 times in the government’s industrial strategy for the tech sector, focusing heavily on its potential benefits.

Insufficient attention is being paid to its disruption, says Zhu. Why is Microsoft publishing reports on job exposure, but not the government? Where is the guidance on how employers and employees should adapt?

“The government should play some important role here, and they’re not,” she says.

Recalling how laid-off steelworkers were left to fend for themselves in the 20th century, Stephany warns it is “crucial to not make the mistakes of the past again”.

Allen couldn’t agree more: “All jobs under threat of AI need to be protected. Because otherwise, how the hell do people earn money?”

The government says it is putting people “at the heart” of its AI plans.

“That includes partnerships with leading tech firms to help us deliver AI skills training to 7.5 million workers, and initiatives to bring digital skills and AI learning into classrooms and communities,” a spokesperson says.

“This will provide training to people of all ages and backgrounds and is backed by £187m.”

They say “thousands of jobs” will be created by AI Growth Zones, areas earmarked for AI data centres where the state will support big tech companies with access to power and planning.

What can you do for yourself?

Workers should be concerned if they’re not trying to use AI, says the consultant.

CVs with AI skills have so far been consistently favoured by a group of 2,000 recruiters observed by Fabian Stephany in an ongoing study.

“If a worker is willing to invest in their skill set, in developing their profile, they should not be worried at all,” they say.

Almost half (45%) of global employers consider AI competency to be a core skill, according to the World Economic Forum.

LinkedIn data shows AI-related skills on member profiles rose 65% year-on-year in 2024.

Job postings on Indeed.com containing AI terms have risen by 170% since the end of June 2023 – albeit from a low starting point (1.7% to 4.6% by 31 August).

“If you’re willing to learn skills that allow you to integrate AI into the job that you’re currently doing, you will probably not only be doing fine, but you might actually have a big career boost ahead of you,” Stephany adds.

In a separate study of 10 million job vacancies in the UK, he found jobs asking for AI skills paid 23% more – a salary boost greater than that expected from a master’s degree (20%).

The best starting point is creating a free account with AI chatbots like ChatGPT, Claude or Gemini, says the AI consultant.

“Log into one of them, provide it a pretty detailed description of who you are, what you do day-to-day, both in your job and potentially in your personal life, and ask it how it can help.

“Right now, that can mean that you do your job better, which gets you promoted.”

Or maybe not.

In the past few months, writer Joe Turner has seen some clients make a sheepish return.

“I see an influx of new jobs coming in and people are now requesting no AI content at all,” he says.

Clients have found its hollow tropes and generic mannerisms carry the unmistakable mark of a “soulless machine”.

“It’s called AI, but it’s not artificial intelligence. It’s just a database of words with reasoning models,” he concludes.

“It puts the words in the right order, but at the end of the day, it means nothing.”