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BVCA Director of External Affairs looks at the Chancellor’s Autumn Statement

Publish Date 24 Nov 2023
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On Wednesday the Chancellor delivered what he described as an “Autumn Statement for growth” and boasting that he was announcing 110 measures to drive growth. The BVCA welcomed the Chancellor’s wide-ranging package of announcements on pension reform which are the next step in creating the long-term framework we need to drive investment into high growth businesses in the UK. The focus on consolidation and building expertise in DC, DB and LGPS pension schemes will be key to helping unlock capital and boosting investment in unlisted assets.

He has also made Corporation Tax full expensing permanent, describing it as the largest tax cut for businesses in modern British history. The decision to bring the changes to NICs forward to January 2024 has contributed to speculation that the Government may be considering a Spring election, although previous political commentary suggested Autumn was more likely.

It was excellent to see the BVCA referenced in the Autumn Statement document, emphasising the Mansion House reforms and the momentum from industry with the venture capital investment compact, which brings together pension funds, trustees, and private market investors to help to unlock pension fund investment. The Compact currently has over 70 signatories with over £100bn in assets under management globally.

The Government’s focus on access to capital included positive steps to back the British Business Bank with a new Growth Fund to channel significant private capital into high growth tech and innovative companies, confirmation of the LIFTS scheme, and the introduction of a new £3m Venture Capital Fellowship scheme under the Department of Science, Innovation and Technology.

Other welcome announcements included the extension of EIS and VCT tax reliefs to 2035 and clear action on R&D tax credits albeit with many questions about whether it will be enough to maintain the UK’s science superpower ambitions.

Science and tech as a lever for growth were clearly a focus for the Chancellor, who committed to invest £500m in compute for AI over the next two financial years with the intention of creating a world-leading AI ecosystem in the UK. Albeit less of a focal point, Net Zero also featured as an area for growth with the Chancellor announcing £960m for ‘ new 'green industries growth accelerator' to promote green technologies which will target key manufacturing sectors such as automotive, aerospace, and life sciences, which may produce innovations key to reducing emissions. The Chancellor’s statement, whilst taking important steps, did not provide the size and scale of commitments needed to ensure the UK remains a Net Zero leader.

Finally, regarding skills and talent, the BVCA urges the Chancellor to build on the announcements from this week and continue exploring options for fiscal measures to encourage more private sector investment in skills development.

You can see the BVCA’s initial reaction here.

 

Karim Palant
Director of External Affairs, BVCA


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