Stephen Byers, Secretary of State for Trade and Industry, announced five schemes worth pounds 245m to promote enterprise and encourage more investment in high-tech start-up companies. The initiatives follow on from the schemes announced in the Chancellor's pre-Budget report to promote share ownership and reward risk takers joining new enterprises with lowly-taxed share options.
Critics argued that a number of the schemes announced by Mr Byers did not involve any new funding. But Mr Byers said they would have the effect of leveraging hundreds of millions of pounds more from private sector investors. Among the initiatives is a network of regional venture capital funds which are expected to attract pounds 250m from the private sector alongside pounds 50m of government "pump priming" money.
There is also a new "Phoenix" fund to encourage entrepreneurs to set up in disadvantaged areas and a high technology fund which Mr Byers said would attract pounds 125m of institutional funding in addition to the pounds 20m pledged by the DTI. Small and medium-sized firms will be supported by a pounds 45m enterprise scheme offering grants of pounds 75,000 for businesses in depressed areas employing up to 250 people.
Mr Byers also announced plans to establish a "knowledge bank" aimed at helping innovative businesses secure financing. The bank could operate by issuing either investment bonds underwritten by the Government or government-guaranteed loans.
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