Question to the HM Treasury:

To ask Her Majesty's Government whether there has been a decrease in venture funding by the European Investment Fund since the Brexit vote; and what effect, if any, this has had on the capability of start ups to secure funding.

The government is aware that the European Investment Fund are undertaking extra due diligence on UK investments in relation to the UK’s exit from the EU. The Government have been clear that whilst the UK remains a member of the EU it enjoys the same rights as other Member states to access funding from the European Investment Fund funding. HMT officials have been working closely with the European Investment Bank Group to overcome delays faced by UK projects.

While there has been a decline in EIF operations in the UK, in 2017, the EIF signed €39.4m (£34.6m) of equity operations in the UK and signed €21.65m (£19m) of guarantees in the UK (the UK received the fourth largest amount of guarantees out of 39 countries in 2017).

To support businesses to secure funding, the British Business Bank has raised the limits on the amount it can invest in venture capital funds from 33% up to 50%, and brought forward some of the £400m additional investment that was announced at Autumn Statement 2016, providing the BBB with the flexibility to significantly increase its investment this year.

British Business Bank analysis of Beauhurst data^[1] showed UK firms received £5.89bn in private equity finance in 2017, an 89% increase on the previous year. The number of equity deals also increased by 6% compared to the previous year. Other analysis published by the British Business Bank^[2] noted that UK start-ups have a high one-year survival rate, significantly above French and German start-ups.

[1] https://www.british-business-bank.co.uk/markets-update-march-2018/

[2] https://www.british-business-bank.co.uk/wp-content/uploads/2018/02/Small-Business-Finance-Markets-2018-Report-web.pdf