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Pre-Budget Report
25 November 1997
The Chancellor and the President of the Board of Trade will be taking a wide-ranging look at ways of improving the UK's record of investment in R&D. As a first step, the financing of high- tech companies, and barriers which may prevent their growth, are to be examined by a new Working Group sponsored by the Paymaster General Geoffrey Robinson.
The Group, chaired by Dr Keith McCullagh, Chief Executive of British Biotech plc, includes senior figures from high-tech companies, financial services and venture capital, and aims to identify practical proposals which will address any barriers.
The Paymaster General said:
"Dr McCullagh has gathered together a very distinguished group, and I am delighted to sponsor it. Any practical proposals the Group makes to address the barriers to growth for companies at the leading edge of technology will be given very careful consideration. I look forward to receiving their report early in the New Year".
The Working Group will begin work shortly. The Treasury will be providing the Secretariat. The Association of British Insurers has also been involved in organising the group.
Its membership is at Annex A.
Financing of high-technology companies is widely acknowledged to be a key issue currently. In recent years the Bank of England, the CBI, the Bio-industry Association and others have held meetings and discussions and issued reports on the issues facing high technology and emerging companies in raising capital in the UK. There have been improvements, but it is widely recognised that there are still a number of barriers which make investment in such companies either unattractive or difficult, to the perceived detriment of UK growth and competitiveness.
Dr McCullagh envisages that the group will meet a number of times over the next six months, with an interim report in January and a final report at the end, with a strong focus on practical proposals to address any issues that the group identifies.
Two related (though distinct) initiatives are being launched by the DTI.
The Competitiveness Working Parties established by the President of the Board of Trade will identify and prioritise barriers to business investment and innovation, and put forward practical proposals for action. Among the issues to be considered by the Investment Working Party, chaired by Lord Hollick, are the cost and availability of capital and the attitude of managers and finance-providers to long-term investment.
A Steering Group is being set up, supported by the DTI, the Treasury, the CBI and the Bank of England, to stimulate and oversee action to address the barriers to growth, faced by small, technology-based businesses, such as those identified in the recent CBI "Tech Stars" report. The areas likely to be considered include building management teams, developing entrepreneurship and market focus, raising finance and realising the potential of corporate alliances.
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Annex A
Finance Advisory Group members
Dr Peter Williams Dr Derek Higgs Executive Chairman Chief Executive Oxford Instruments Group plc Prudential Portfolio Managers
Mr Geoff Lindey Sir David Cooksey Head of UK Institutional Investment Chairman JP Morgan Advent Ltd
Mr David Quysner Mr Peter Meinertzhagen Managing Director Chairman Abingworth Management Ltd ABN Abro Hoare Govett
Mr Craig Pickering Dr Alistair Keddie Head of Industry Team Director, Innovation Unit Treasury Office Department of Trade and Industry
Mr Peter Agar Mr Richard Regan Deputy Director General Head of Investment Affairs Confederation of British Industry Association of British Insurers
Mr Mike Smith Ms Christine Soden Head of Business Finance Division Finance Director Bank of England Chiroscience plc
Dr Herman Hauser Mr Hugh Stevenson Director Chairman Amadeus Capital Partners Ltd Mercury Asset Management
Dr Keith McCullagh Chief Executive British Biotech plc
Pre Budget 1997 Press Notices index page
