BVCA Reacts To UK Budget

by Robert Lee, Tax-News.com, London

27 April 2009

The British Venture Capital Association (BVCA) has condemned the Budget and is particularly disappointed with the Strategic Investment Fund.

Responding to the Budget, Simon Walker, Chief Executive of the BVCA, said:

"The Chancellor claimed that his Budget would focus on 'investing in the future' and 'playing to this country's strengths' while ensuring that Britain remained a 'world class centre for finance.' The reality is that he has invested in the past, is undermining the country's strengths and his measures represent a real threat to Britain's status as a world financial centre.

The income tax increases which he has announced effectively end Britain's competitiveness in taxation and will discourage investors from being located and doing business here. The borrowing figures are breathtaking and should have been scaled back by a much more vigorous approach towards public spending. Measures on pensions tax relief further distort the pension system and act as a disincentive to saving and investment.

The BVCA is particularly and deeply disappointed by the decision to create a vague Strategic Investment Fund, which looks like a return to the public sector seeking to "pick winners" (but ultimately subsidise losers), rather than the highly targeted UK Innovation Fund for venture capital in which the private sector would have played a pivotal role. This is, in short, not a Budget for recovery but a Budget which makes the burden for British business even heavier".

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