The major UK political parties have released their manifestos ahead of the general election, featuring plenty of policies aimed at supporting the tech industry. AI, data, fintech and R&D are among the key tech areas that the Conservatives and Labour are addressing in this year’s election.
The incumbent Conservative Party has been struggling in the polls, while Kier Starmer’s Labour has been looking to reinvent the party as a champion of business and tech.
Have the tech policies from the parties been enough to win over the tech industry?
AI, data and infrastructure
Labour highlighted the need to scale the UK’s data infrastructure to support the rise of technologies such as AI.
Labour’s proposal to “remove planning barriers to new data centres” was described by Philip Kaye, co-founder of Vesper Technologies, as a “step in the right direction”.
“We must learn to walk before we run. A commitment to removing red tape preventing the UK from building the data infrastructure it desperately needs is long overdue,” Kaye said.
Kaye noted that Labour’s plan was the “most detailed manifesto yet with regards to data infrastructure”, despite only including a “few lines of policies which the industry has spent years crying out for”. According to Kaye, this only goes to show how little attention has been given to the issue by the dominant political forces in the UK.
“The next government now needs to seriously listen to data experts – or risk playing catch-up at the next general election as well,” Kaye added.
The Labour manifesto also called for “binding regulation on the handful of companies developing the most powerful AI models” and the banning of “sexually explicit deepfakes”.
Dave Holt, a partner at Potter Clarkson, acknowledged the importance of preventing “harmful actions such as deepfakes”. However, the solicitor warned that Labour “must be cautious not to create an innovation freeze in the AI space by over-regulating”.
The Conservatives’ pledge to invest £1.5bn into large-scale compute clusters to support British AI capabilities was celebrated by Ekaterina Almasque, general partner at OpenOcean.
Almasque said that if realised, the plan “would be a boon for UK startups” and could “enhance the country’s AI capabilities significantly”.
However, Almasque said there was concern over the distribution of these expanded resources.
“It would be absolutely vital to create frameworks allowing innovative startups access to these resources at a fair rate.”
Amanda Brock, CEO of OpenUK, was disappointed that despite the “year plus of hard work in AI” in the UK, opportunities to “reap rewards has apparently been largely omitted from the manifesto”.
Brock said the Conservative manifesto missed out on previous claims from the party to support “open sourcing tooling around AI” and build an “elegant solution to AI regulation”. She said these ideas have been missed in a manifesto that doesn’t “set out the principles for a digital future”.
Fintech, finance and investment
The economy has taken centre stage in this election, with challenges such as inflation and rising interest rates overwhelming the Treasury, businesses, investors and individuals.
Neither party will be able to form a government with much in the way of financial headroom, and so encouraging economic growth, investment and the scale of promising British industries has been emphasised by the Tories and Labour.
The Conservatives pledged to increase R&D funding from £20bn to £22bn, while Labour said it will extend national research budgets from five years to 10 years, along with investing in HMRC to tackle tax avoidance from larger businesses.
“An increase in R&D may sound welcome, but arguably addressing the root causes of R&D claims being denied, due for example to HMRC inefficiencies, would go further in the longer term,” said Georgia Gibson-Smith, technology sector specialist at Menzies.
While the Conservative Party manifesto committed to keeping in place EIS, SEIS and VCT, there was no mention of the popular startup investor tax incentive schemes from Labour.
Seb Wallace, co-founder and investment director at Triple Point Ventures, said “it’s important that these initiatives are maintained, given the vital work they do in supporting UK innovation”.
He added: “We also need to see immediate improvements to the R&D tax credits scheme for SMEs, to ensure we stimulate tech innovation across the country.”
Labour called for additional support for open banking, a model that has played a key role in the rise of the UK’s fintech sector.
Andrew Martin, founder and CEO of SMEB, praised the support for open banking, noting that the biggest barrier to widespread adoption in the UK is simply a lack of awareness.
“We need a new approach that educates consumers and businesses on its benefits. As well as educating the market, we need to expand the functionality to include all bank activity, rather than limiting it to data sharing,” Martin said.
Many of Labour’s economic policies have sought to win the favour of businesses and investors. However, its manifesto also contained a plan to close the tax “loophole” of capital gains, which has not
The policy, which was first reported by The Times, would mean profits made by a private equity fund would be taxed as income instead of the lower capital gains rate.
Hoxton Ventures analyst Hussein Kanji described this plan as “the equivalent of stabbing yourself in the toe and cutting off your pinky as part of your training regime, as you tell the world you want to win gold in the Olympics”.
TechCrunch’s editor-at-large Mike Butcher, however, made the point on X that low rates of capital gains taxes don’t necessarily boost investments.
“Business owners avoid tax by shifting income over time. Instead, retained profits are held as cash, and do not lead to higher investment. Thus, lower rates of tax on business income produce large benefits that disproportionately accrue to the rich,” Butcher said.
The Conservatives and Labour both expressed a desire to increase regional and gender equality in investment and both emphasised the role the British Business Bank would play in this.
The Startup Coalition, a lobby group, said it is “great to see a concerted focus on funding underfunded founders” and celebrated both the Conservative plan to “continue the Invest in Women Task Force and the Lilac Review” and Labour’s plan to reform the British Business Bank and maintain the Mansion House reforms.
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