Ministers roll out the red carpet for entrepreneurs and their investors
A THE LINK CHANCELLOR the virtues of innovation and entrepreneurship are about as surprising as a defense minister praising the military. Entrepreneurs can thus be forgiven for taking Budget Day dispatches with a pinch of salt. But Rishi Sunak’s speech on October 27 matched warm words with action.
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A host of programs will channel taxpayer dollars to the private sector. The government-backed British Business Bank will receive Â£ 1.6bn ($ 2.2bn) to be allocated to its regional funds, which provide debt and equity to start-ups. The Global Britain Investment Fund, which invests in life sciences, offshore wind and automotive manufacturing, receives a boost of Â£ 1.4 billion. Another Â£ 150million goes to a fund that aims to rebalance geographic inequalities in access to start-up equity.
All of this is overshadowed by a promise to increase government spending on research and development (R&D) to Â£ 20 billion a year by the end of the legislature in 2024. After adjusting for inflation, this represents an increase of about a quarter from current levels. It is sorely needed. crude from Great Britain R&D spending was 1.8% in 2019, compared to 2.5% on average in OECD, a club of predominantly rich countries. Most of the difference is due to lack of shine R&D UK private sector spending relative to its international peers. But the Treasury hopes that more public funds will also stimulate private investment.
The extra money was accompanied by an early warning of an attempt to force businesses to spend more at home. Of the Â£ 47.5 billion R&D for which companies asked for tax relief in 2019, only Â£ 25.9bn was made in Britain. Noting that countries like America and Australia do not offer similar discounts for R&D carried out abroad, the government has promised to “refocus aid on innovation in the UK. “
In addition to handing out cash, the Chancellor worked to reassure startup founders and their investors that long-standing grievances would be addressed. One of them is the cap on the fees that occupational pension plans can pay to investment managers. Designed to protect retirement savings from inordinate investment costs, it also limits the ability of pension plans to invest in things like infrastructure and start-ups, due to performance fees charged by capital funds. -risk. Treasury officials will now consult on easing the ceiling.
Another is access to foreign talent, which should be liberalized next spring. A new visa program will allow those with a job offer from a fast growing UK company to migrate with few conditions. A second will make graduates of top universities eligible for visas, even if they don’t have a job offer. It’s time for startup lobbyists to come up with a new wishlist.
This article appeared in the Great Britain section of the print edition under the headline “Something went wrong”