The association for the people and businesses of Sheffield's digital industries.

talent 23, a year of talent and skills

a year of talent and skills

What does a Labour government mean for the tech industry?

We’ve summarised the likely impact of our new government at a local and national level.

After a none-too surprising election result, we end the working week with a new Labour government in place. But beyond the headline promises and policies around the cost of living crisis, the NHS and taxes, what can we expect from Keir Starmer’s party when it comes to our industry? 

We have looked at what digital economy publications and pundits were saying in the build up to the election about Labour’s approach to tech, summarising the key points for you. To clue yourselves up further and get a clearer idea of what to expect, take a look at our sources list at the bottom of the post.

What to expect

Technology is not one of Labour’s five key missions, however as Tech UK pointed out it does run “horizontally” through all the party’s commitments.

On Industrial Strategy and Economic Development

Labour plans to create an “Industrial Strategy Council”, and bring forward a new Industrial Strategy that will include a specific sector deal for AI with potential for additional sector deals in other technology verticals. 

The party also plans to make it easier to build laboratories, digital infrastructure, and gigafactories (to accelerate transport electrification) by removing some types of planning and procurement regulation. The plan is to create a “Regulatory Innovation Office” to help update current regulation, speed-up approval times, and help coordinate cross-cutting regulation across government.

There is a renewed push to deliver gigabit fibre and 5g across the whole country by 2030.

Funding for this infrastructure may be boosted by a new “National Wealth Fund”, which they plan to have attracted around £7bn by the end of the next parliament.

On taxation, they have announced a “Roadmap for Business taxation” and pledged not to increase Corporation Tax in order to provide more certainty to businesses across the duration of the next parliament.

Labour has also pledged to reform the Business Rates System, which is likely good news for high streets but perhaps less so for online retailers (it’s hard to argue that reform of these taxes, which are collected locally but administered centrally, is not long overdue).

There’s a review of pension investment to provide more capital into industry, along with reform of the British Business Bank to help more small firms outside London to access finance.

Perhaps the biggest change we’ll see locally is the manifesto commitment to increased devolution and the prominence given to “Local Growth Plans”. Keir Starmer advocates a “full fat approach to devolution,” aligning industrial strategy and investment with regional priorities. As more money for economic development, infrastructure, skills, health and social care are devolved from central to regional governments, the opportunities for us as a tech community to work with local and regional stakeholders to bring in investment should increase. (This is why our Regional Partnerships are so important, and why you should consider joining the Membership Board to have a say in what we work with them on!).

On Digital, Tech and Innovation 

As mentioned above, there’s a commitment to ensure the Industrial Strategy supports the development of AI, and removes planning barriers to new Data Centres & telecoms infrastructure.

There’s a pledge to create a National Data Library to bring together existing research programmes and help deliver data-driven public services.

Tech also features strongly in Labour’s plans to ‘fix the NHS‘, including using AI to speed up diagnostic services, for instance.

There’s a push to extend funding durations, with multi-year funding settlements for local authorities, and ten-year key budgets for key R&D institutions. These are aimed at reducing ‘wasteful’ competitive bidding and initiatives that can’t deliver scale or sustainability within the current funding windows.

This is alongside an effort to simplify the public procurement process and provide a mission-driven approach, in order to support innovation and reduce micromanagement.

There’s a big push to support universities in creating spin-outs, following last year’s  Independent Spin-out Review.

Regarding cybercrime and online safety, there are commitments to ban sexually explicit deepfake content; the focus on using technology to keep pace with modern threats; further development of the Online Safety Act; and working with tech companies to combat fraud, among other harms.

On Skills and Inclusion

They are looking to merge Job Centre Plus and the National Careers Service, and combine this with more devolved funding for local partnerships to get more people into work (particularly those with long-term health conditions).

Establish a new organisation called “Skills England” to oversee the national post-16 skills effort, and coordinate business, training providers, unions, and government to ensure a highly trained workforce fit to meet the requirements of the Industrial Strategy and Net Zero Targets.

Devolve adult skills funding to Combined Authorities, extending the Local Skills Improvement Plans (LSIPs) that we consulted two years ago. Our T23 work should feed directly into this process, to ensure professional digital skills are included in these plans and funding requirements.

There are pledges to transform Further Education colleges into specialist “Technical Excellence Colleges” which will work with businesses, trade unions and local government to provide young people with better preparation and access to high skilled local employment needs.

Reform to the Apprenticeship Levy to create a more flexible Growth and Skills Levy with Skills England overseeing the qualifications accreditation process. This should make funding available for more than just apprenticeships, which could be very good news for tech companies.

As outlined in David Blunkett’s 2022 report “Learning and skills for economic recovery, social cohesion and a more equal Britain”, Labour’s post-16 skills strategy will aim to improve regulation and standards, make it easier for young people to access higher education and to move between different institutions. Whether it will address the gaping holes in current higher education business models remains to be seen.

And finally, the party has also indicated a willingness to work with (Sheffield Digital member) Good Things Foundation to help people on low incomes facing digital exclusion by donating old government IT equipment.

I’m sure there are more policies that will make an impact on our digital tech and media ecosystem over the course of the next five years, and please drop a comment if I’ve missed something major out, or join in the discussion on LinkedIn or Slack.

Our sources

We’d like to thank Danny Dickinson at Sunderland Software City who provided a list of key pledges that informed this list, and all our partners in the UK Tech Cluster Group (UKTCG) who have been discussing these issues over the last few months.

Tech UK, the industry-led lobbying organisation, broke down the manifestos from Labour and other main parties, comparing them to their own “Seven Tech Priorities” paper.

Raconteur, the UK business media platform, covered the “key manifesto takeaways for tech leaders”, looking at Labour, the Conservatives, the Lib Dems and the Greens. They also provide a ‘tech industry response’ with quotes from several business leaders.

Computing, the industry magazine and media platform, published individual articles looking at each of the main parties’ manifestos and asking “What’s in it for tech?”. Here is their coverage of the Labour Party.

The Financial Times published a huge amount of election coverage and analysis, of course, but among it all is this piece that specifically looked at Labour’s plans to reform government planning and procurement processes to “…make it easier for Big Tech groups to build critical infrastructure such as data centres…”.

Finally, the Open Rights Group conducted a live Hustings on “Digital Rights in the age of AI”, chaired by Timandra Harkness with Cllr Jack Lennox, who is the Green Party’s spokesperson for Culture, Sport and Digital Inclusion; Viscount Jonathan Camrose who was the minister for Artificial Intelligence and Intellectual Property; Tim Clement-Jones who is a Liberal Democrat peer and former Chair of the House of Lords Artificial Intelligence Select Committee. Well worth a watch or listen!