Industry: Private Equity & Venture Capital

Country: United Kingdom

Website: investmentagenda.co.uk

March 31, 2015

What do growth companies want from the next UK Government?

 

Driving SME growth should be one of the main priorities of the next Government, the British Private Equity & Venture Capital Association (BVCA) argues today.

In the final part of The Investment Agenda – the BVCA campaign designed to demonstrate the impact of private equity and venture capital on the UK – we assess the business policies of the three main political parties and how they would affect small and medium-sized enterprises. Around 90% of private equity and venture capital investment in the UK is directed at SMEs and ours is an industry which has a proven track record in helping businesses to grow and succeed.

We also make a series of policy recommendations which are based upon the views we have canvassed from our members and the companies they back, laying down a framework to make Britain the best place in the world to start and run a business.

Tim Hames, Director General of the BVCA, said:

Growth companies are the bedrock of economic stability and success and it is imperative any future government focuses attention on creating an environment to enable such businesses to expand and succeed. Private equity and venture capital, at its essence, is about funding and supporting these types of enterprises – be they in retail, manufacturing, biotech or video games – and what we need to see from the next administration is a commitment to a robust investment agenda which places growth companies at the very heart of the UK economy.

Recommendations include:

• Institutional investors such as pension funds should be encouraged to invest in small, growth companies via venture capital by introducing a tax credit on their other UK dividend income of up to 30% on investment into a venture capital trust (VCT). 

• Unlock corporate venturing capital by reintroducing the Corporate Venturing Scheme to encourage direct investments from big business into small business, or introducing a corporate venturing initiative modelled on VCT designed to encourage indirect investments.

• Expand the entrepreneurs’ visa and issue more visas in general for highly skilled migrants, particularly those who have studied a STEM (Science, Technology, Engineering and Mathematics) subject, to help meet the demand of fast growing businesses.

• Scrap the annual cap on ‘exceptional talent’ visas, and lift the quota for the graduate entrepreneur scheme from its current limit of 1,900 places.  

• Further tax and related incentives should be put in place to enhance further university technology spin-outs. R&D tax credits should be extended for SMEs, and Catapult Centres should enhance their support for early stage research phases and be better scaled to concentrate resource in key geographies and sectors where the UK is already strong.

• Greater economic devolution, including incentives for graduates to stay and work in places where they graduate, greater flexibility over budgeting and spending, including tax retention powers and accelerating the connectivity of local infrastructure.

 
FOR FURTHER INFORMATION PLEASE CONTACT

Simon Horner, Director, Policy and Public Affairs, BVCA
shorner@bvca.co.uk
Tom Allchorne, Director, Communications, BVCA
tallchorne@bvca.co.uk