The Chief Secretary to the UK Treasury David Gauke MP this morning praised the private equity industry as being “of huge importance to the success and growth of the economy”, before outlining his department’s priorities for the remainder of this government.
Gauke, previously a regulatory solicitor at law firm Macfarlanes, was addressing delegates at the BVCA’s annual summit in London.
He was effusive in his praise of private equity and venture capital. “You help companies reach their potential,” he said, “You also help them realise some healthy profits too. We should all see the industry as a real strength for the United Kingdom.”
Private equity investment “creates more jobs, more tax revenue and more wealth” for the country, said Gauke.
The minister’s comments come at a time when UK businesses are wrestling with the potential impact of Britain voting to exit the EU. Forty percent of UK businesses backed by private equity and venture capital believe the economic conditions in the UK have worsened in the past 12 months; 45 percent think they will get worse in the coming year. Despite this, a majority of businesses – 63 percent – reported an improvement of the performance of their own businesses.
Gauke went on to outline in brief the Treasury’s three priorities, which includes £100 million in additional infrastructure spending for the remainder of this government’s term. “Not just the big flagship developments, such as Crossrail and HS2, but thousands of smaller projects around the country,” he said, referring to broadband access, flood defences and energy capacity.
Second, he said, was “keeping the tax system competitive”. “It’s a big lever to keep industry competitive,” he said, adding that by 2020 corporation tax will be 17 percent, the lowest in the G20.
Third was to protect spending on science and innovation.