UK general election 2024: pledges relevant to tech and industrial businesses

The Labour manifesto gives more of a highlight to the digital agenda than that of the Conservatives and Liberal Democrats. Businesses will want to see a strong focus on technology regulation and support for innovation and the development of AI from the next government – and to understand how the government will operate on a global scale in relation to managing the opportunities and risks of technology and data, and to address cyber risk and fraud.

Here, we take a closer look at the pledges of the main political parties relevant to the technology and industrial sectors.

AI

In government, the Conservatives have overseen a period during which developments in artificial intelligence (AI) have accelerated. Policymakers and regulators have been grappling with the opportunities and challenges associated with that.

Read more of our analysis of the parties' 2024 manifesto pledges

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In the UK, the Conservative government’s approach to regulating AI currently involves tasking existing UK sectoral regulators with regulating the use of AI using their existing powers, but with reference to a set of cross-sectoral principles. In tandem with this, the government has secured voluntary commitments from leading AI developers on to AI safety. This provides for oversight and testing of next-generation AI systems, so-called ‘frontier AI’, by the UK’s AI Safety Institute before those systems are put into public use.

If Labour wins the election, the approach would be different. They have pledged to introduce binding regulation on the companies developing the most powerful AI models, to ensure the safe development and use of such models. They have also said they will ensure the UK’s industrial strategy supports the development of the AI sector.

The Liberal Democrats have said they would create a clear, workable and well-resourced cross-sectoral regulatory framework for AI. They also said they would seek to negotiate the UK’s participation in the Trade and Technology Council with the US and the EU, to shape global AI regulation.

Digital

Labour have pledged to update national planning policy to make it easier to build digital infrastructure.

The Conservatives have said they would double the digital and AI expertise in the civil service to improve public services, if re-elected.

The Liberal Democrats have committed to increasing the rate of digital services tax imposed on social media firms and other technology company giants, from 2% to 6%, and set a UK-wide target for digital literacy.

Technology

Labour have said that they would work with technology companies to stop their platforms being exploited by fraudsters.

In the life sciences and health space, Labour said they would reform incentive structures to drive innovation and faster regulatory approval for new technology and medicines in the NHS. The party have also pledged to enable innovation and growth in financial services by supporting new technology.

The Conservatives have committed to continuing investing over £1.5 billion in large-scale compute clusters, which they have identified as vital to powering the potential of AI and research.

The Liberal Democrats’ plans include expanding the British Business Bank and enabling it to ‘crowd-in’ private investment, in particular in zero-carbon products and technologies.

R&D

Labour have promised to scrap short funding cycles for key R&D institutions in favour of shifting to a 10-year budgets model.

The Conservatives have said they would increase public spending on R&D to £22 billion a year and maintain R&D tax reliefs.

The Liberal Democrats said they would aim for at least 3% of UK GDP to be invested R&D by 2030, rising to 3.5% by 2034.

Diversified industrial

Labour said they would introduce a new UK industrial strategy and re-establish an Industrial Strategy Council.

The Conservatives have set out plans to progress the advanced manufacturing plan developed last year, which is underpinned by a £4.5 billion commitment to secure strategic manufacturing sectors, including automotive, aerospace, life sciences, and clean energy.

Manufacturing

Labour have outlined plans to develop a British jobs bonus for clean energy developers. Under that initiative, up to £500 million of public funds would be made available every year from 2026 to incentivise businesses that offer good jobs, terms and conditions, and build manufacturing supply chains in industrial heartlands, coastal areas, and energy communities.

The Conservatives have said they would invest £1.1 billion into the Green Industries Growth Accelerator to support British manufacturing capabilities. They have also pledged to provide a bonus to reward energy firms that invest in manufacturing in the most disadvantaged places in the UK or that invest in more sustainable supply chains.

Tax and other headline commitments

General business

Labour said they would introduce a new UK industrial strategy and re-establish an Industrial Strategy Council – the latter being a pledge also made by the Liberal Democrats, which said they would put the body on a statutory footing. Labour has also pledged to publish a roadmap for business taxation for the next parliament.

The Conservatives said they would promote digital invoicing and improve enforcement of the Prompt Payment Code.

Corporation tax

Labour have pledged to cap corporation tax at the current level of 25%. The Conservatives have said they would not increase corporation tax either. The Liberal Democrats have said that they would make the case for increasing the global minimum rate of corporation tax to 21%.

VAT

Labour have pledged no increase to VAT. The Conservatives said they would keep the VAT threshold under review. The Liberal Democrats said they would cut the VAT rate applicable to public charging of electric vehicles to 5%.

Income tax and National Insurance

Labour have said that they would not impose increases to National Insurance or the basic, higher or additional rates of income tax. The Conservatives have pledged to abolish the main rate of National Insurance entirely by the end of the next parliament. The Liberal Democrats said they would raise the tax-free personal allowance, which applies before income tax is levied, when public finances allow.

Business rates

Labour have said they will replace the business rates system. They have also pledged to end the VAT exemption and business rates relief for private schools.

The Conservatives have promised to enable councils to retain all business rates growth within a defined zone for 25 years. They have also pledged to increase the multiplier on distribution warehouses that support online shopping over time.

The Liberal Democrats have said they would abolish business rates and replace them with a commercial landowner levy.

Tax reliefs

Labour have promised to retain a permanent full expensing system for capital investment and the annual investment allowance for small business.

The Conservatives have said they would lift the employee threshold, allowing more companies to be considered medium-sized and benefit from associated tax reliefs. In line with an announcement set out by chancellor Jeremy Hunt in his March Budget, the Conservatives have also committed to extending the ‘full expensing’ policy to leased assets.

The Liberal Democrats have pledged to expand rural fuel duty relief.

Other tax pledges

Labour have said that they would abolish the non-domiciled tax status, if elected to government.

The Conservatives have said they would not impose any increase to the rate of capital gains tax.

The Liberal Democrats have pledged to reform capital gains tax, increase the UK’s digital services tax rate from 2% to 6%, and restore the bank surcharge and bank levy revenues to 2016 levels in real terms.

Employment, skills and immigration

Labour have pledged to establish a youth guarantee, where all 18- to 21-year-olds would be given access to training, an apprenticeship, or support to find work,

Labour said they would also implement what they term a ‘new deal’ for working people, in full. This, they said, would include banning zero hours contracts; ending fire and rehire; and ensuring workers have basic rights to parental leave, sick pay, and protection from unfair dismissal, from ‘day one’ in a job.

Labour have also said they would establish a flexible growth and skills levy, change the remit of the independent Low Pay Commission, and reform the points-based immigration system.

The Conservatives have pledged to create 100,000 more apprenticeships in England every year by the end of the next parliament.

They have also committed to maintain the national living wage in each year of the next parliament at two-thirds of median earning.

The Liberal Democrats have said that they would establish a new Worker Protection Enforcement Authority. They also said they would fix the work visa system and exempt NHS and care staff from the immigration skills charge.

Their other plans include to improve the quality of vocational education, including skills for entrepreneurship and self-employment; replace the apprenticeship levy with a broader skills and training levy; and create new lifelong skills grants for adults to spend on education and training throughout their lives.