Tories will reform RIP and IR35, says Hague

A future Conservative government would reform the IR35 "brain-drain tax'' and review Labour's cyber snooping law as part of a...

A future Conservative government would reform the IR35 "brain-drain tax'' and review Labour's cyber snooping law as part of a drive to make Britain the new technology world leader.

Parliamentary reporter

William Hague made the promises last week as he unveiled his party's draft election manifesto, Believing in Britain.

He said the UK is ideally placed to capitalise on its lead in new-economy technologies and promised to simplify the regulations for IT industries so that they could be left alone to grow by government. Measures would include:

  • Reforming the tax on IT consultants known as IR35, which has caused a brain drain of some of the UK's brightest workers

  • Reviewing the operation of the Regulation of Investigatory Powers legislation

  • Asking the Competition Commission to review BT's market power in local Internet connections as part of an examination of reducing industry costs and boosting consumer access to the Internet

  • Speeding up Department of Trade & Industry procedures for granting licences to new telecoms operators

  • Radically deregulating telecommunications to accommodate the advent of digital television with the possible establishment of a single regulator for the convergent communication technologies

  • Ensuring quick and cheap Internet delivery of government services

  • Better teaching of IT in schools

  • Proceeds from future sales of radio and mobile phone spectrums would be used provide endowment funds for Britain's top universities to set them free of government.

    Hague said, "As the opportunities provided by the Internet and the IT revolution expand exponentially, Conservative Britain will be the capital of the new economy.

    "We set out a comprehensive package of specific policies to help IT industries flourish in our country - including reforming damaging brain-drain taxes, radically deregulating the telecommunications industry and encouraging more competition in local Internet connections.''

  • The Liberal Democrat leadership has also recognised the growing importance of the IT industry, and is to launch a bitter attack on Labour's treatment of the Internet at the party conference later this month. It will claim that RIP Act is an attack on civil liberties. It wants the "illiberal'' legislation scrapped and warns the cost to ISPs will drive firms abroad and undermine the UK's drive to lead the world in e-commerce.

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