Labour calls for greater support for start-ups

A new report for the Labour party has called for greater support for start-ups in the UK, with fintech highlighted as an area requiring improved support. 

A panel made up of a tech entrepreneur, researcher, CEO and cross-bench peer wrote up the report for the party. 

In the report’s foreword, Shadow Chancellor of the Exchequer, Rachel Reeves MP, said: ‘I have heard time and again about the stubborn obstacles preventing many businesses from scaling up, and the opportunity to start and grow a business is still not shared widely enough.’ 

‘If the UK had the same level of venture capital investment as a % of GDP as the US, this would mean £16 billion more venture capital investment – nearly double the level currently’ she added.

The five policy recommendations made in the report include: unlocking institutional investment like pension funds, making the British Business Bank ‘truly independent’ so it can leverage increased external funding, translating the country’s global leading university research into growth for the economy, ensuring public procurement processes work for start-ups, and using the tax system and public equity markets to incentivise investment. 

Research in the report also found that women and ethnic minority founders of start-ups were being underinvested in when compared to their counterparts. The report states that only 0.24% of all venture funding between 2009 and 2019 went to black founders, despite 3.5% of the population being represented by that demographic. 

Similarly, it reported that less than 5% of venture founding goes to female founders and 84% of funding went to all-male teams in 2020. 

Labour’s report comes at the same time as the annual State of European Tech report which found that UK investment into tech ventures had seen one of the steepest drops in Europe when compared to the record funding invested last year. 

Ms. Reeves addressed the impact of the UK’s exit from the European Union on the state of UK start-ups in her foreword, she said: ‘We are at a post-Brexit crossroads. We can continue down the road of managed decline, falling behind our competitors, or we can draw on bold thinking to propel us forward. 

‘We can cling to the old ways; or we can apply ourselves with creativity, determination and common sense to shaping our future outside the European Union, while improving our trading relationships, including with our nearest neighbours.’

Photo: Chris McAndrew/ Official portrait of Rachel Reeves MP/ (CC BY 3.0)