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What does this election mean for innovation in the UK

The golden rule in an office, never talk politics – well sorry, I feel that I need to break that rule! The election manifestos have been unsurprising from the main two parties – sort Brexit on one side or change everything the other side is the summary. But of selfish importance to me and my clients is the parties view on how government should invest in R&D to make sure the UK leads the world in innovation.

How do political parties match up on R&D

Both parties commit to ever-increasing importance of R&D spend against GDP but the method of investment ranges. When you consider the billions involved, there is a logistical consideration of how to deploy the funds into the right hands and this tends to be either through partners such as Innovate UK or through the tax office.

Labour believe that the direct form of investment is the best way and that tax relief is not the right option whereas the Conservatives back both. Neither party have really gotten into the detail around IP but there are some headlines around R&D tax that people should be aware of:

  1. Labour – will scrap the RDEC scheme and Patent Box. The SME R&D tax credit scheme will go under review. My crystal ball would say it may not last a 5 year Labour government
  2. Conservatives – will improve the RDEC scheme and review the R&D tax definition to make sure it encompasses innovation in the digital world

Away from the main parties manifestos, the absolute stand out document is the CBI manifesto which is well worth a read. It underlines the importance of how R&D must be considered in a wider ecosystem and the inputs needed to make it thrive. I hope whoever gets in government, executes the CBI manifesto for business.

I would like to see R&D tax and other incentives develop, and continue to drive and support risk taking innovators who quite frankly will keep the UK ahead. The innovation developed in the private space is deployed to the benefit of all and creates greater efficiency in the public spend for the good of all. We see numerous clients working on how tech can be deployed in the NHS to reduce waiting times, provide front line support and make sure every single penny goes towards better care and not administration.

And let’s not forget a very important factor here, the tax investment regime is administered by HMRC, a public body already set up, with an infrastructure that works. Instead of setting up numerous new delivery functions and committees to manage them, take some of that money and further invest in HMRC resource. HMRC works as a delivery function and we should think about how we continue to use it to deploy funds for innovation purposes.

Let’s back the UK, in every sector, in every county, in every school and in every business.

-Luke Hamm, CEO.

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