The UK’s political parties must commit to supporting entrepreneurs in their election manifestos in light of fears over a potential black hole in post-Brexit funding for startups, a leading business group has warned.
In the first of a series of manifesto papers, the Institute of Directors (IoD) has urged all parties to back young businesses and provide a rapid resolution to questions of future access to the European Investment Fund (EIF).
The IoD has called on political leaders to clarify whether they will seek to maintain access to the fund, which channelled €2.3bn into UK venture capital funds between 2011 and 2015, and if not, to state how the shortfall will be covered.
The group also highlighted the need to retain the pool of foreign talent available to startups, upon which the tech sector in particular is heavily reliant, while demanding a trial on higher tax reliefs for investments outside of London and the South East in a bid to boost business beyond the capital.
Jamie Kerr, Head of Entrepreneurship and Tech Policy at the IoD, said:
“Boosting entrepreneurship has been a UK success story over the last few years, and as we prepare to leave the EU, enabling business to set up and grow will be even more vital.
“Brexit has introduced questions on funding for growing companies. The European Investment Fund has channelled billions to UK firms through venture capital funds, but the future of this stream is in doubt. After the election, we need to know whether the next Government will argue to maintain access to the EIF post-Brexit, and if not, how it will make up the shortfall. If future collaboration with the EIF is not their aim, ministers should beef up the capacity of the British Business Bank as soon as possible so it can pick up the slack.”
The IoD’s statement follows calls from the CBI and the British Chambers of Commerce for a focus on job creation and a long-term vision for the UK economy.
The Conservatives, Labour and Liberal Democrats are yet to publish their manifestos.
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