Thank you, Tim, and good evening everyone.
I see a lot of familiar faces here.
It’s always great to be asked to speak to organisations like the BVCA.
I was in finance a lot longer than I’ve been in politics, so it always feels a bit like coming home!
And it’s kind of fitting to be here at the Savoy, halfway between the Square Mile and Westminster, between my first career and my second.
Of course a lot has changed in your industry since I left Deutsche Bank in 2009.
For example, last month I saw that there’s a new kid on the VC block.
The company behind the children’s TV programme is going to invest in start-ups in education and health.
We’ll see finance brought to you by the letters I, P and O.
And, having met plenty of VC people during my time in the City, I’m confident that Oscar the Grouch will fit right in!
Don’t worry Rob, I’m not talking about you!
J. Paul Getty once said that the secret of success in business was to rise early, work late… and strike oil.
It’s sound advice, up to a point.
But most businesses need a more reliable source of finance.
And that’s where private equity and venture capital really come into their own.
Now, more than ever, you have a vital role to play in Britain’s economy.
And I’m proud to stand here tonight and say that the private equity and venture capital sector has the full support of the Business Secretary.
I know that’s not always been the case in the past.
It’s all too easy to paint you as vultures or parasites.
And let’s face it, no politician ever lost votes by being too harsh on people working in finance!
But such days are behind us.
I know just how important your work can be.
I know that, far from being the bloodsuckers of internet myth you actually breathe life into companies.
You don’t strip out jobs, you create them.
You put your money where your mouth is, and take the kind of calculated risks that benefit us all.
When I worked in emerging markets I saw, again and again, how a little faith from investors at the right time can make all the difference.
You take an idea, see its potential, and give it the boost it needs to become reality.
When you get it right, everyone wins.
And when you get it wrong… Well, you’re the biggest losers.
Fortunately that doesn’t happen very often!
BVCA members are currently investing more than £5 billion in more than 700 companies in the UK.
Together, those companies employ well over 100,000 people.
And of course the vast majority are SMEs with high growth potential, which means they’re likely to go on and create many more jobs in years to come.
It’s clear that your confidence is coming back.
[Political content removed]
Equity investment in small businesses grew by more than 40% in the year to October.
You’re also making a real difference right across the country.
Three-quarters of BVCA members’ investment goes outside London.
You’ve recently doubled the level of investment in my home region, the West Midlands.
That’s a real boost for the region as we work to fire up the Midlands Engine.
And a real sign that you’re ready, willing and able to back exciting, innovative ideas wherever they may be.
That’s particularly important right now.
Last week I attended the annual conference of British manufacturers, I spoke there in fact.
And one message that came through loud and clear from all the speakers was that manufacturing is changing.
That industry is changing.
That as we enter this fourth industrial revolution the greatest demand in advanced economies is not going to be for raw materials, but for ideas.
New ways of thinking
New ways of working.
New ways of manufacturing.
In the past we’ve thought of cutting-edge start-ups as something limited to Silicon Valley and Tech City.
However, in 2016 those labels are becoming less important.
The lines between industry and technology are becoming blurred.
That change brings with it incredible potential for economic growth.
But only if the right finance and funding is available.
And only if the people holding the purse strings can match the vision and ambition of the innovators themselves.
That means you, by the way!
But I’m not going to tell you to go out on a limb on your own.
My department, and the government as a whole, is and will remain a committed partner in helping you support innovative companies to develop and grow.
The British Business Bank is playing an active and collaborative role.
So far its VC Catalyst, Angel Co-Fund and Enterprise Capital funds have facilitated new finance of almost £1 billion for nearly 500 businesses.
On top of that, the bank will shortly be calling for innovative and ambitious investment strategies for delivering debt and equity finance through the £400 million Northern Powerhouse Investment Fund.
So get your thinking caps on!
We’re also committed to delivering a tax system that incentivises investment in growth and innovation.
So far we’re offering Venture Capital Trusts (VCTs), the Enterprise Investment Scheme (EIS) and the Seed Investment Scheme.
And there’s no doubt this trio of measures are working.
In 2014 to 2015, VCTs issued £435 million of new shares and currently have investments in over a thousand companies.
And in one year alone the EIS facilitated more than £1.5 billion of investment in not far short of 3,000 businesses.
It’s pretty clear that it’s playing a pivotal role in supporting a vibrant, early stage equity culture.
In fact the schemes have proved so successful that we sought and secured State Aid approval for letting them provide additional support to knowledge intensive companies.
Exactly the kind of companies that will be shaping the future of British industry.
When those companies are ready to go public, we want it to be as easy as possible for them to do so.
That’s why we abolished stamp duty on Alternative Investment Market shares and made them eligible for ISA investments.
We have also worked with the London Stock Exchange as it has introduced such innovations as the High Growth Segment.
It allows high growth potential businesses to list on the main market with an initial free float of as low as 10%.
And of course we’re also doing everything we can to make Britain the best place in the world to start and grow a business.
So we’ve extended the doubling of small business rate relief until 2017.
We’ve cut corporation tax to the lowest level of any major economy.
We’ve lifted hundreds of thousands of businesses out of employer National Insurance contributions.
We’ve set the highest ever permanent level for the annual investment allowance.
And we’ve got Research and Development tax credits, the Patent Box and Entrepreneurs’ Relief, all of which encourage further investment in innovation and ideas.
We’ve slashed £10 billion of red tape for business, and are committed to cutting another £10 billion by 2020.
And the Enterprise Bill, currently before Parliament, will create a new Small Business Commissioner to give SMEs a stronger voice.
But we can do more, and we are doing more.
We need to ensure that the UK has the research base and the productivity levers in which innovative high-growth companies can start, grow and compete globally.
Last summer, as you may have seen, we launched a plan called Fixing the foundations.
It’s our cross-government plan for increasing productivity right across the economy.
Our vision for increasing long-term investment in people, capital and ideas, as well as making markets more dynamic.
That includes everything from increasing the quality and quantity of apprenticeships, to reforming the planning system, to changing the way the government supports growing companies who want to export.
Alongside this, at the Spending Review, I was able to secure an investment of almost £7 billion as part of the national science capital commitment.
I also protected today’s £4.7 annual billion resource funding in real terms.
Together, this underlines my commitment to keeping the UK a world leader in science and research.
We’ve created Catapult centres that help business and researchers turn great ideas into commercial reality.
And, building on this, we’ll shortly be publishing a National Innovation Plan to ensure the UK remains an international beacon for bright ideas.
The plan will bring together ideas, levers and investment from across government, so we can create the right conditions for businesses to innovate and grow.
These are the businesses that are the key to our country’s economic future.
And that’s why your role in backing them through their early development and growth phase is tremendously important.
But it’s not just about cold, hard cash.
Venture capital and private equity at its best is about more than just providing funding for companies to develop, grow or restructure.
It’s about nurturing talent too.
About helping talented yet inexperienced entrepreneurs to devise and implement long-term growth strategies.
About understanding what it takes to help a high-potential business through the development, early growth and scale-up phases.
And that’s where the people who been there and done that a thousand times before, people like the BVCA members here tonight, can really add something special to the mix.
It’s your wisdom, understanding and long-term commitment that brings the greatest rewards.
And that’s why you can do so much more than any politician or civil servant ever could.
You’ve been there, you’ve done that, you’ve seen what works and you know what doesn’t.
And it’s that knowledge, that experience, that will turn the next generation of great British ideas into the next generation of great British businesses.
That will turn exciting innovations into real-world jobs and growth.
What you do isn’t easy.
It isn’t easily understood and all too often it’s not even popular.
But it is absolutely vital to the future of our economy and our country.
And I’m proud to say that both myself and the government support you all the way.
Have a great evening.