Tories pledge to keep tax breaks for hi-tech industry

The policy shift is revealed in a report on innovation, science and engineering published today by entrepreneur and industrial designer Sir James Dyson for the Tories.

The report set out proposals aimed at making the UK the leading hi-tech exporter in Europe and includes a recommendation to refocus on the Government’s £850 million R&D tax credit from large companies onto high-tech small businesses and new start-ups  "in order to stimulate a new wave of technology".

Tory leader David Cameron and shadow business secretary Ken Clarke said they would accept Dyson’s proposal on R&D tax credits, reversing indications made in 2006 that the Tories would scrap the scheme.

Other proposals in the report under consideration by the Tories include:

- A new prestigious national science and engineering award aimed at encouraging at boosting the standing of science and engineering
- More scholarships at university level to boost take up of science and engineering courses and more freedom for universities to develop short course and vocational degrees
- More focused funding for the transfer of knowledge between universities and business to boost innovation and for public-private research institutions.

The Dyson report was preceded by a publication by the Royal Society, the national academy for sciences, that warned that failure to invest in research in the UK would bring decades of economic decline.

The report noted that the UK’s current investment in innovation compared less than favourably with commitment made elsewhere, such as France’s £31 billion for the "knowledge economy".

Ingenious Britain: making the UK the leading high tech exporter in Britain is available here.