A recent consultation by the Treasury has revealed a ₤4 billion funding gap between US and British firms, and it is now hoped that the new fund will “help address this gap and boost British business.”
Currently British start-ups rely on the European Investment Fund (EIF) for financial backing. By creating the new fund, these businesses would still have access to funding even after Brexit when they would no longer be able to receive funds from the EIF.
Chancellor Philip Hammond highlighted the key role this new fund would play in the success of Britain's startups, saying:
“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.”
According to Mr. Hammond, the new fund could be set up either as a public-private partnership or it could be added to the Government's balance sheet and sold off later once it had established a solid track record.
The Treasury hopes that this new fund would “help cutting-edge British startups become world-leading unicorns.”
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