- June 3, 2020
- Posted by: Iestyn Williams
- Category: In the News
The Liberal Democrats are calling for urgent changes to the Government’s new ‘Future Fund’ to get investment flowing into innovative British businesses, save jobs and ensure the economy can grow strongly after the coronavirus crisis.
The party’s Business Taskforce, chaired by former Siemens UK CEO Juergen Maier, is warning that the Future Fund, which is due to launch by the end of the month, “is far too focused on venture capital firms and simply won’t work for many UK start-ups”.
The £250m Future Fund offers firms loans of between £125,000 and £5m – provided they can secure private investment of at least the same amount. However, the terms of the Government scheme make it incompatible with investments made under the Enterprise Investment Scheme (EIS) – which rules out the vast majority of ‘angel’ investments.
The Liberal Democrats are therefore calling on the Government to fix the Future Fund by making it compatible with the existing EIS, so that the large number of UK start-ups who rely on individual investors can benefit from the funding.
Acting Leader of the Liberal Democrats Ed Davey said:
“The coronavirus crisis is causing enormous financial hardship for families and businesses across the country.
“Once this crisis is over, we are going to need the best of British innovation to grow the economy and create good, well-paying jobs in all parts of the UK. We cannot afford to see brilliant start-ups disappear for good.
“That’s why the Liberal Democrats are urging the Government to fix the Future Fund so that start-ups can get the investment they desperately need right now. Ministers must not cut off this vital funding with pointless red tape.”
Juergen Maier, Chair of the Liberal Democrat Business Taskforce, said:
“Innovation led technology start-ups have become a major success for UK’s economy, but the coronavirus crisis could wipe out a whole generation of start-ups if they can’t get government support.
“The Future Fund could be a lifeline for these businesses, but it is far too focused on venture capital firms and simply won’t work for many UK start-ups.
“The Government must ensure that the majority of start-ups who rely on investments from individuals under the Enterprise Investment Scheme can qualify for these loans.
“If the Government gets this right now, the benefits in jobs and economic growth will be enormous.”