Chancellor Jeremy Hunt has unveiled a £320 million plan to increase innovation and release the first wave of investment from his Mansion House Reforms prior to his Autumn Statement. The scheme aims to help pension funds invest in high-growth, innovative companies, providing an extra £1,000 for individuals’ pension pots every year, and boost economic growth. The government is endorsing new investment vehicles that bespoke to the distinct requirements of pension schemes, for investments into the UK’s innovative companies. The Long-term Investment for Technology and Science (LIFTS) programme will see £250 million invested in two successful bidders, providing over a billion pounds of investment from pension funds and other sources into UK science and technology businesses. The British Business Bank will establish a new Growth Fund to give pension schemes access to opportunities in the UK’s most promising businesses.
The recent BVCA Venture Capital Investment Compact will be enhanced through a range of measures to reinforce the UK’s renowned venture capital industry. The government will also introduce a Venture Capital Fellowship programme, which supports upcoming world-leading investors in VC funds, similar to the successful US Kauffman Fellowship. Chancellor Hunt said: “Innovation is the key to our future success as a nation, and it is vital that we do all we can to help companies start, scale and grow in the UK.”
Moreover, representatives from several universities and investors will gather at University College London (UCL) East, where they will endorse a new set of ‘best-practice policies’ recommended by the independent review of spinouts. Chancellor Hunt will provide at least £50m additional funding for the British Business Bank’s successful ‘Future Fund: Breakthrough’ programme, which enables direct investment to support innovative companies to scale. According to the Chancellor, this will “deliver our Mansion House Reforms and unleash the full potential of our pensions industry.”
The independent review, run by Irene Tracey, Vice-Chancellor of Oxford University and Andrew Williamson, managing partner of Cambridge Innovation Capital, proposes innovation-friendly policies that universities and investors should adopt to make the UK the best place in the world to start a spinout company. The recommendations aim to streamline the process and incorporate lessons from successful collaborations in the past. The Chancellor has accepted all recommendations and will outline his full response to the Autumn Statement.
The government’s initiative aims to generate growth in the economy through innovation and increase investment in high-growth, innovative companies. This provides opportunities for pension funds and other investors, as well as supporting the venture capital industry. The Chancellor’s financial support highlights the government’s commitment to driving innovation and growth within the UK.