Research and Development tax credits should be targeted at high-tech companies, small businesses and new start-ups in order to stimulate a new wave of technology – and when public finances allow, the rate should be increased to 200 per cent.

This is one of the proposals made by Sir James Dyson to rebuild Britain’s manufacturing and technological base and turn the country into Europe’s leading high-tech exporter.

“Nearly 70 per cent of the tax breaks are claimed by banks and the service industry,” said Sir James. “These should be scrapped but the ones for hi-tech development should be boosted from 140 per cent to 200 per cent.

In his report “Ingenious Britain”, commissioned by the Conservative Party, Sir James pulled no punches about what he thinks is wrong with the current system.

“When David Cameron invited me to help the Conservatives reawaken Britain’s innate inventiveness and creativity I did not hesitate,” he said. “Here was an opportunity to put forward my own views and those of some of Britain’s leading industrialists, scientists, engineers and academics in a coherent form – a way forward rather than a nostalgic glance back.”

The report falls into five challenges: culture; education; exploiting knowledge; financing high tech; and supporting high tech.

Each chapter is prefaced by figures revealing what is wrong now. For instance, under the heading “culture: developing high esteem for science and engineering”, the lead page says it all by pointing out that while four per cent of teenage girls want to be engineers and 14 per cent want to be scientists, a massive 32 per cent want to be models.

Under the heading education, it is revealed that almost one in four secondary schools in England no longer has any specialist physics teachers” while under “financing high-tech start-ups”, it was pointed out that the annual rate of lending to business fell by a record 8.1 per cent in 2009.