The Government has proposed a new fund aimed at supporting start-ups and entrepreneurs once Britain has left the European Union.
The new National Investment Fund would help “cutting-edge” British start-ups become world-leading “unicorns” – the name given to tech firms valued at $1 billion or more.
It was revealed that fewer than one in 10 firms that receive seed funding in the UK go on to get fourth round investment, compared to nearly a quarter in the US.
The new fund could be set up either as a public-private partnership or be placed fully on the Government’s balance sheet and sold off once it has established a sufficient track record.
The Treasury said it had identified a £4 billion funding gap between US and British firms. It said the new fund would “help address this gap and boost British business”.
It’s also suggested that the funding is designed to plug a hole should access to the European Investment Fund (EIF) dry up.
“The new UK based fund would help to ensure that firms still have access to the funding they need, should Britain’s relationship with the EIF end when the UK leaves the EU”, the Treasury said.
Mr Hammond added: “Britain is an innovation powerhouse and it’s vital that we make sure our cutting-edge firms have the funding they need to meet their potential and conquer new markets.
“Meeting this challenge will boost our productivity and enable us to create more well paid jobs across the UK.”
Further consultation will explore how firms might benefit from investment originating from pension funds, and how to commercialise research from UK universities and drive investment in firms across the UK.