‘Government needs to do more to support British start-ups’
A one in five UK start-ups consider establishing a European outpost in the wake of Brexit, one industry MD asked: is the British government doing enough to encourage home-grown business success?
Statistics show that 99% of all UK businesses are SMEs who generate 54% of the country’s GDP. Yet this majority of business has been continually overlooked by the government in favour of multinationals – a factor that could be contributing to start-ups choosing to move elsewhere.
Research from Silicon Valley Bank – a global bank that specifically targets start-ups – also says 1% of UK start-ups have firmly committed to moving their headquarters to Europe and a further 16% are thinking of relocating to Europe or elsewhere.
Michele Wietscher, director at Newview Windows and Conservatories, said: “Confidence among the UK start-up business community has taken a hit since Brexit. A dip in Sterling has also created some uncertainty for many established businesses that export, and the wider issues of the election and continued high taxes create an unfortunate cocktail of challenges. Despite this, many businesses are still thriving and succeeding but we do need to look at the issues of supporting entrepreneurs and those who take the risk of setting up a business.”
The survey highlights the difficulty entrepreneurs have attracting venture capital funding in a post-Brexit Britain, and the possibility of running costs for businesses rising.
UK venture capital funds received 2.3 billion euros from the European Investment Fund (EIF) between 2011 and 2015 but it remains unclear if UK businesses will still have access to the EIF after the UK leaves the EU.
While there are schemes supported by the UK government, such as the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS), Michele said start-ups need more support.
“The government needs to make British business funding a priority in Brexit negotiations,” she said. “They will either need to negotiate to retain access to the EIF or put in alternative plans to make up for a shortfall in funds. Our own plans for export and expansion have been put on hold until Brexit negotiations have been completed. We are waiting on a concrete decision and we hope it will be the right one.
“Entrepreneurs and SMEs are the backbones of the UK economy and it is vital they have the resources and support in place to flourish in a post-Brexit environment.”