{"id":1881,"date":"2024-06-26T13:11:29","date_gmt":"2024-06-26T13:11:29","guid":{"rendered":""},"modified":"2026-07-26T19:02:08","modified_gmt":"2026-07-26T17:02:08","slug":"what-would-a-labour-government-mean-for-uk-innovation","status":"publish","type":"article","link":"https:\/\/leyton.com\/uk\/insights\/articles\/what-would-a-labour-government-mean-for-uk-innovation\/","title":{"rendered":"What would a Labour government mean for UK innovation?"},"content":{"rendered":"\t\t
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As we approach election day<\/a>, political commentators seem increasingly confident that we\u2019ll see a change of government with all signs currently pointing to a Labour majority. While the outcome of the election won\u2019t be known for sure until the early hours of Friday, 5th of July, we\u2019ve examined Labour\u2019s manifesto to get a sense of how a Labour government would approach UK innovation for driving research and development (R&D) and business growth.<\/p>\n\n\n\n

Industrial strategy<\/h2>\n\n\n\n

Labour\u2019s manifesto paints a picture of a Britain filled with innovative and cutting-edge businesses, but it suggests that more needs to be done to turn these companies into commercial success stories across the country.<\/p>\n\n\n\n

In terms of how they plan to achieve this, much time is devoted to their \u201cindustrial strategy\u201d, where the manifesto speaks of plans to work with employers, universities, colleagues and industry<\/a> bodies to identify \u201cgrowth sectors\u201d so that they can create the programmes and infrastructure needed to support key industries both locally and nationally. While the implication is that it will take time to identify where investment and support are needed for their industrial strategy, the manifesto does list several sectors of particular focus based on their strength compared to other countries. These sectors include research institutions, professional services, advanced manufacturing<\/a>, and creative industries, which will all receive support from a new Industrial Strategy Council.<\/p>\n\n\n\n

The manifesto also explicitly mentions plans for several other key sectors, including construction<\/a>, financial services<\/a>, artificial intelligence, automotive, aviation, life sciences<\/a> and energy<\/a>, as well as transport<\/a> and communications infrastructure. Increased investment in these sectors, which we discuss in more detail below, is likely to drive R&D \u2013 especially as there is often specific mention of the need for greater innovation and better use of cutting-edge technology in these areas.<\/p>\n\n\n\n

Construction<\/h3>\n\n\n\n

There is a promise to \u201cget Britain building again\u201d by building 1.5 million new homes over the next parliament, many of which are due to be social and affordable housing. Labour\u2019s approach prioritises building on brownfield land (previously used urban land) and grey belt land (poor quality green belt land). They\u2019ve also committed to building a new generation of new towns and a series of urban extensions and regeneration projects.<\/a><\/p>\n\n\n\n

The assumption is that they plan to help drive their building strategy by continuing the full expenses regime for Capital Allowances<\/a> (see below for Labour\u2019s plans on business taxation). <\/p>\n\n\n\n

Financial services<\/h3>\n\n\n\n

The manifesto also says that a Labour government will look to drive innovation and growth in financial services by supporting new technology, giving the examples of Open Banking and Open Finance where financial data (such as bank accounts, pensions and investments) is shared with third parties to help create new services and products.<\/p>\n\n\n\n

Artificial intelligence<\/h3>\n\n\n\n

Labour plans to support the development of Artificial Intelligence (AI) by making it easier to build new data centres and removing existing planning barriers. It also states that greater regulation will be needed for some of the more powerful forms of AI, and that misuse of the technology (such as the creation of explicit deep fakes) will be banned.<\/p>\n\n\n\n

Automotive<\/h3>\n\n\n\n

There is mention of an automotive sector plan, which will focus on the UK\u2019s transition to electric vehicles through increased EV manufacturing and a faster rollout of charging points.<\/p>\n\n\n\n

Aviation<\/h3>\n\n\n\n

The manifesto briefly suggests that a Labour government would back sustainable aviation fuels and support airspace modernisation.<\/p>\n\n\n\n

Life sciences<\/h3>\n\n\n\n

There are plans for an NHS innovation and adoption strategy, which includes reformed incentive structures to increase innovation and deliver faster regulatory approval for new medicines and healthcare technology.<\/p>\n\n\n\n

Energy<\/h3>\n\n\n\n

Delivering clean energy by 2030 is a clear priority for a future Labour government, with investment promised for a zero-carbon electricity system that includes onshore and offshore wind, solar, carbon capture and storage, hydron, and marine energy. This is planned to be delivered by a proposed new publicly owned company, Great British Energy, which will receive \u00a38.3 billion worth of funding over the parliamentary term. The manifesto commits to continuing to use oil and gas for the foreseeable future (it reads \u201cfor decades to come\u201d), while the UK transitions to more sustainable options. There is also the promise of more investment in new nuclear power stations and small modular reactors (SMRs).<\/p>\n\n\n\n

Transport and communication infrastructure<\/h3>\n\n\n\n

The manifesto declares that infrastructure planning needs a boost to encourage innovation and investment. Labour aims to deliver this by making it easier to build laboratories, digital infrastructure, and gigafactories (factories that mass-produce batteries for energy storage or electric vehicles).<\/p>\n\n\n\n

As well as this, there are plans for a ten-year infrastructure strategy to improve roads, reservoirs, and railways, which will be managed by a new National Infrastructure and Service Transformation Authority. As part of the strategy, a particular focus is on improving rail connectivity in the north of England through public and private investment.<\/p>\n\n\n\n

The manifesto also promises to increase investment in 5G, aiming to deliver full gigabit and national 5G coverage by 2030.<\/p>\n\n\n\n

Private investment<\/h2>\n\n\n\n

Labour aims to increase public investment to \u201cde-risk\u201d private investment. They plan to manage this with a National Wealth Fund of \u00a37.3 billion over their first parliamentary term. The fund aims to create more jobs, benefit economic growth, and support their clean energy plans. In the hope of creating three pounds of investment for every pound invested, they say they will be investing:<\/p>\n\n\n

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