As we approach the UK General Election, it’s crucial for tech startups and the wider innovation economy to understand the positions of major political parties on issues affecting our sector. At Propeller-Tech, we’ve analyzed the manifestos and recent statements to provide you with a clear picture of what to expect.

Current Landscape and Challenges

The UK already has several support mechanisms for startups, including public grants, British Business Bank funding, Entrepreneurs’ Relief for capital gains tax, and investment schemes like EIS and SEIS. However, the main challenges facing tech startups – access to talent and finance – haven’t been prominently addressed in party manifestos.

Party Positions and Pledges


  • Introduce a new UK industrial strategy and re-establish an Industrial Strategy Council
  • Update national planning policy to facilitate digital infrastructure development
  • Work with tech companies to combat fraud on their platforms
  • Implement 10-year budget cycles for key R&D institutions
  • Cap corporation tax at the current 25% level
  • Replace the business rates system


  • Continue the current approach of tasking existing regulators to oversee AI using cross-sectoral principles
  • Maintain the AI Safety Institute for oversight of frontier AI systems
  • Double digital and AI expertise in the civil service
  • Increase public R&D spending to £22 billion annually and maintain R&D tax reliefs
  • Progress the advanced manufacturing plan with a £4.5 billion commitment
  • Extend ‘full expensing’ policy to leased assets

Liberal Democrats:

  • Create a clear, cross-sectoral regulatory framework for AI
  • Increase the digital services tax rate from 2% to 6%
  • Aim for 3% of UK GDP invested in R&D by 2030, rising to 3.5% by 2034
  • Abolish business rates and replace them with a commercial landowner levy
  • Expand the British Business Bank to support zero-carbon technologies

Key Areas of Focus

  1. AI Regulation: While the Conservatives favour the current approach, Labour pledges binding regulation on powerful AI models, and the Lib Dems propose a new cross-sectoral framework.
  2. Digital Infrastructure: Labour aims to update planning policies to support digital infrastructure development.
  3. R&D Investment: All parties commit to increasing R&D spending, with varying targets and approaches.
  4. Tax Policies: Proposals include maintaining or capping corporation tax, reforming business rates, and adjusting R&D tax reliefs.
  5. Skills and Immigration: Parties propose various measures to address the talent gap, including reforms to the immigration system and increased support for apprenticeships and vocational training.

What This Means for Tech Startups

While tech startups aren’t explicitly at the forefront of party manifestos, the proposed policies will significantly impact our sector. The focus on AI regulation, increased R&D investment, and potential tax reforms could create new opportunities and challenges for innovative businesses.

At Propeller-Tech, we believe that regardless of the election outcome, it’s crucial for the next government to:

  1. Maintain and enhance existing support mechanisms for startups
  2. Address the talent gap through both education and immigration policies
  3. Encourage increased private investment in the innovation economy
  4. Develop a balanced approach to AI regulation that fosters innovation while ensuring safety
  5. Support cross-border expansion and collaboration, particularly post-Brexit

We’d love to hear your thoughts, feel free to leave a comment or two!

Natalie Harper

Author Natalie Harper

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