Waterstones would stock books created using artificial intelligence, the company’s boss has said, as long as they were clearly labelled, and if customers wanted them.

However, James Daunt, a veteran of the bookselling industry, said he personally did not expect that to happen.

“There’s a huge proliferation of AI generated content and most of it are not books that we should be selling,” he said.

But it would be “up to the reader”.

An explosion in the use of artificial intelligence, or AI, has prompted heated debate in the publishing industry, with writers concerned about the impact on their livelihoods.

In a wide-ranging interview with the BBC’s Big Boss podcast, Daunt said while Waterstones uses AI for logistics they currently try to keep AI generated content out of the shops.

“As a bookseller, we sell what publishers publish, but I can say that instinctively that is something that we would recoil [from],” he said.

Daunt, who is heading into his 36th Christmas season in the book trade, said Waterstones’ success had been built on handing more control to individual store managers to serve their own communities.

“Head office is there to make life easier,” he said.

“Make sure the books that they order turn up on time, but do not tell [managers] where to put them.”

Daunt also said he was a bit of an outlier in welcoming last week’s Budget and he raised the prospect of a stock market flotation of the book chain.

A report published last month by the University of Cambridge found that more than half of published authors feared being replaced by artificial intelligence.

Two-thirds also said their work had been used without permission or payment to train the large language models which lie behind generative AI tools.

But some writers use AI themselves, especially for research, and AI tools are being used to edit novels, and even produce full-length works.

“Do I think that our booksellers are likely to put those kind of books front and centre? I would be surprised,” Daunt says.

“Who’s to know? [Technology firms] are spending trillions and trillions on AI and maybe it’s going to produce the next War and Peace.

“And if people want to read that book, AI-generated or not, we will be selling it – as long as it doesn’t pretend to [be] something that it isn’t.

“We as booksellers would certainly naturally and instinctively disdain it,” Daunt said.

Readers value a connection with the author “that does require a real person” he added. Any AI-generated book would always be clearly labelled as such.

The softly spoken former banker has overturned convention before.

When he took over at Waterstones in 2011, he took the bold decision to end the practice of publishers paying to have their books displayed prominently in stores. It cost him £27m in lost revenue and prompted a “nervous breakdown” among publishers, he said, but it paid off and in 2016 the company returned to profit.

Now Waterstones staff write their own book recommendations, choose books of the month, and the manager selects what goes on the display tables.

As well as books, the chain stocks pens, reading lights, games, wrapping paper and other stationery.

The strategy has helped it defy the decline on the High Street, with around ten new stores opening a year, and profits in 2024 of £33m against sales of £528m.

Waterstones is part of a wider stable, including Foyles and Blackwell’s, owned by hedge fund Elliott Advisers.

Daunt has also been appointed chief executive of Barnes and Noble, the large US bookstore chain also owned by Elliot Advisers.

Success on both sides of the Atlantic has led to speculation that shares in Waterstones and Barnes and Noble could be jointly floated in either New York or London.

“It feels like an inevitability and probably better than being flipped to the next private equity person,” says Daunt.

Private owners naturally aim to sell businesses on, he points out. “It’s what they do.”

But it is not clear that London, which he says has been “suffering” as a location for initial public offerings lately, would be considered suitable.

“We’re based out of London but we have a huge American business; Barnes and Noble is much larger than Waterstones.”

As for last week’s Budget, Daunt says it sometimes feels like he might be “the only person who is sympathetic” to the situation the chancellor is in.

The government has drawn the ire of the business community for raising employer National Insurance and the minimum wage and not coming up with more growth-boosting measures.

But the Budget included changes that were “very helpful” to companies like his, said Daunt.

Business rates will be lower for retailers operating out of small sites, while larger business properties, like warehouses will pay more.

Daunt said that although Waterstones does have larger premises, levelling the playing field between High Street and online retailers was something he has been calling for for a long time.

With the days of advent now ticking past, the company is well into the se portion of the year when Waterstones makes about 70% of its annual profit.

He says the post-pandemic rebound, with people returning to bookshops, does not seem to have gone away.

Personally he has also retained his love of reading, even after 36 years in the industry. But he does have one bad book habit, he said.

“Because I read professionally, I do a rather awful thing which is start a lot of books and then not finish them.

“I love the excitement of opening up a first novel and not knowing what’s going to come of it. But if it isn’t quite that good, I’ll just move on.”

The government will commit to bringing in enhanced protections against unfair dismissal from the start of 2027, after watering down its plans last week.

Labour ministers agreed to introduce the right to make a claim after six months in a job instead of on day one, after a backlash from business groups.

This new qualifying period would still be shorter than the current two years.

At the time of last week’s climbdown, the business department did not specify when the amended six-month right would come into force.

However, ministers are now expected to make a commitment to implement the new protection from 1 January 2027, when the legislation to deliver the change returns to the House of Commons on Monday.

Such assurances, made from the dispatch box, are not legally binding but are seen as carrying additional political weight by MPs and peers.

The move, which was first reported by The Guardian, followed talks this week between ministers and former deputy PM Angela Rayner and ex-employment minister Justin Madders, two key architects of the original proposals.

Following the talks, Rayner agreed to withdraw an amendment she had planned to table, which would have made the start date 2026.

Writing on social media, Rayner appeared to welcome the government’s decision, saying a January 2027 start date would introduce protection for those hired after July 2026, bringing “real change for workers”.

Currently, after two continuous years in a job workers gain additional legal protections against so-called “ordinary” unfair dismissal.

It means employers must identify a fair reason for dismissal – such as conduct or capability – and show that they acted reasonably and followed a fair process.

Until last week, Labour was planning to scrap this qualifying period completely at an unspecified point during 2027, with a new legal probation period, likely to have been nine months, introduced as a safeguard for companies.

But following talks with unions and business groups last week, the qualifying period will instead be set at six months’ service, and the legal probation period shelved.

The U-turn has been widely welcomed by business groups, which had warned the original proposals would discourage companies from hiring.

It has been condemned by some MPs on the left of the Labour Party, as well as the Unite union, a major donor through the affiliation fees its members pay to the party.

The government still plans to bring in new day-one rights to sick pay and paternity leave rights from April 2026.

Separately, the government is also expected to abolish the current limits on compensation for financial loss in ordinary unfair dismissal cases.

Currently, awards to former employees who successfully bring a claim are limited to either their annual salary or £118,223, whichever is lower.

But the government plans to amend its employment rights bill to abolish both these caps, as the bill goes through its final stages in Parliament.

This would bring the process more into line with “automatic” unfair dismissal cases – where workers have been sacked for reasons such as discrimination and whistleblowing – where financial loss awards are uncapped.

Abolishing the caps did not feature in the original version of the bill unveiled in October last year, or in Labour’s general election manifesto.

But ministers committed to do so last week during talks to reach an agreed route forward between some unions and industry groups.