eNewsletter

Abolishing the innovation poll tax

The UK has endured an alarming decline in innovation relative to its competitors, a trend that is contributing to the UK’s poor productivity performance.

Official data from the Office of National Statistics and the World Intellectual Property Organisation show that:

  • Research and Development spending in the UK is falling behind the EU average (In 2012, UK R&D spending is now 1.72% of GDP compared to EU average of 2.06%)
  • UK patent applications by residents have fallen the most among the G7 since 1992 (An 18.5% fall in the UK since 1992 – compared to a 29.4% rise across rest of the G7)
  • Adjusting for R&D spending, only Japan has seen a worse fall in applications in the G7 since 1992
  • Whereas patent applications by non-residents have stabilised in the UK since 1992, in the rest of the G7 they grew 152%
  • Patent grants have fallen 27% in the UK compared to an increase of 141% across the rest of the G7
  • High-tech exports are growing much faster in France and Germany than in the UK since 1992 (twice and three times more than UK, respectively)

In Abolishing the Innovation Poll Tax published by the Centre for Policy Studies on Friday 27 June 2014, Adam Memon calls for supply-side reforms to the patent process which will reduce the barriers to innovation. These include:

  • Abolishing patent renewal fees, a poll tax that is a disproportionately heavy burden for start-ups and SMEs
  • Simplifying the patent application process
  • Establishing new accelerated patents for small businesses (a patent application usually takes between three and four years to complete)
  • Defending the successful “patent box” from EU attack (the patent box provides businesses with a reduced corporation tax rate of 10% on profits derived from patented innovations)