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A Labor government will set up a state-backed group to boost small businesses by linking institutional investors and venture capital firms, Shadow Chancellor Rachel Reeves will announce on Thursday.
Reeves will say that “British TB” – a reference to the French technology finance scheme – could strengthen connections between investors and venture capital groups to improve the flow of money to young companies.
The plan is one of several recommendations made by former Treasury minister Lord Jim O’Neill in a “start-up review” for Labour, which will be unveiled on Thursday at a business event hosted by Reeves and party leader Sir Keir Starmer.
The event — attended by 350 business leaders — is part of Labor’s efforts to be seen as a pro-enterprise party despite its long-standing financial ties to the trade union movement.
Starmer is at the core of a broader effort to steer the party down a more centrist path followed by former Labor prime minister Tony Blair, who won three general elections a generation ago.
O’Neill, the former chairman of Goldman Sachs Asset Management, is a cross-party peer who previously served as Treasury Minister in David Cameron’s Conservative government where he was responsible for the “Northern Powerhouse” project to boost economic growth in the north of England. .
It will say British start-ups have “enormous potential” to improve the UK’s economic fortunes beyond London.
The French TB scheme was launched by President Emmanuel Macron in 2020 and has since secured more than €18bn in commitments from institutional investors for French tech companies.
Under O’Neill’s plan, the UK scheme would match institutional investors with an accredited list of VC firms, with the former asked to allocate a portion of their funds to the latter.
Quasi Kwarteng, the former Tory chancellor, proposed a similar idea in July when he was business secretary, however, the proposal met with some opposition from the Treasury.
The report will also recommend that the government focus more on giving the British Business Bank, the state-backed economic development investor, greater independence, the ability to leverage external funding and encouraging the development of entrepreneurial clusters around universities.
It will also propose the introduction of a new annual “dashboard” that summarizes each university’s record for creating “spinouts”, businesses based on academic research that are likely to go unexploited otherwise.
“All universities [should] A spinout offers a range of options for founders to choose from, including an option where the university holds a relatively small portion of the equity,” he said.
The O’Neill review involved a panel that spoke to more than 120 industry leaders at roundtables across the country.
Hailing the report as “a radical plan to make Britain the world’s high-growth, start-up hub”, Reeves told the event in Canary Wharf: “These are challenging times. But I know that the spirit of enterprise, creativity and endeavor is as present in Britain today as ever. They never had.”
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