We already have an organisation in the FTSE 100 specifically designed to provide business funding

http://www.3i.com/about3i/key-facts.html

For smaller businesses;

http://www.bbaa.org.uk/

We also have EIS schemes, VCTs, 21 new enterprise zones (with tax breaks and infrastructure support), not to mention the £47.2bn in lending to enterprise from the big 5 banks in Q1 alone

The efficiency of this large support network for businesses means that viable companies often find that capital is available when required. By skewing this model to artificially support industries where we have limited or no competitive adavantage we are storing up future problems. When companies consequently fail, the cost of the bad loans and lost investment capital is eventually born by our society as a whole in terms of unemployment, higher costs as lenders recoup losses etc.

If any changes should be made, we should be looking to improve the incentives for investment into starts ups even further, provide tax relief at investor level, remove CGT on enterprise investments from Day 1, thereby encouraging more capital investment but allowing the market to ascertain which businesses to back. That way, if you have a great manufacturing idea, or engineering, or marketing, or software, or catering, or dare I say it financial services (?!) then funding would be even more available.

Anonymous 1 needed this 'Off the Record'

1. Update on Bombardier, and 2. Response to Still on life support/Jeremy Bosk.
From today's Derby Evening Telegraph, available on-line. "Three letters pleading for action but still David Cameron remains silent."
1. 1400 jobs already gone, not including the supply chain.
Mr David Cameron MP
Oct 10-Creating a New Economic dynamism.
"indeed the UK exports more to Ireland than to Brazil, Russia, India, China - combined."
"My approach is clear, British business should have no more vocal champion than the British Government and that's why I have put the promotion of British commerce and international trade at the heart of our foreign economic policy."
March 11- Spring Conference.
"Together we'll create the business, we'll create the jobs, we'll create the opportunities, we'll light the spark of enterprise, we'll fire our economy, we'll drive our country forward. And together we will do it."
July 11-Derby City Council leader-a Conservative, Philip Hickson has sent three letters to Number 10 asking for an urgent meeting with David Cameron to talk a about a plan to save UK's last remaining train-maker.
Mr Hickson said "I'm frustrated and annoyed that no 10 seems to be taking no interest in this issue."
Business Secretary Vince Cable has phoned me twice and each time I told him that so far no response. He said he would look into it.
"We will keep on knocking on the door of no 10 until he agrees to meet with us."
The Derbyshire and Nottinghamshire Chamber of Commerce has sent a letter to no 10.
The Chief Executive said "The Chamber is extremely disappointed not to have received a response."
I think the above summarises the situation quite well.
All mouth and no action?
2. I tend to agree with Jeremy, that there are serious shortcomings on the funding side.
Banks are more interested in their bottom line, rather than provision of long term finance.
Venture Capital, similarly has a 3 year interest, not long term, etc
Short termism for short term gain is the problem.
When coupled with uncertainty, interest rate changes, possibility of instant withdrawal of loan and overdraft facilities, it is simply a disaster.

Prof Eman

Anonymous 1 needed this 'Off the Record'

Just a short addendum
BBBC News UK 09/07/2011, by Nick Robinson-Sir John Major addresses devolution argument
Today he calls for what some call "devo max"
Scottish Parliament to be given powers to control everything except foreign affairs, defence and the economy.
Here are some issues we have been considering-
"...and warns that the country's political classes are too obsessed by short term politics and too complacent about the signs that the country is in long term decline."
"In terms of GDP, the UK is the sixth most wealthy country in the world. but our national balance sheet carries many liabilities. Our infrastructure is old. Our health service is creaking. Whilst the best of our education-especially higher education -is world class, some of it is unforgivably awful."
"We are up to our ears in debt. The Exchequer is empty. The gold is gone. the post-dated cheques are accumulating interest. We are over-taxed. We have an underclass:poorly housed and unmotivated."
We are no longer an Empire, nor will we be aver again. We are a shrinking military power.By choice, and with majority public approval, we are semi-detached members of the EU. And even America-for so long our closest ally who generally sees the world as we do-is turning her face to the East, as self-interest determines she must."
Well, could not have put it better.
Seems some politicians are aware of some of the problems we have been discussing.

Prof Eman

'Gold rush' in nano technology

As universities search for new sources of income, how do you turn academic excellence into commercial value?

Jonathan Flint, head of Oxford Instruments and Today's Friday boss, explains his company's success.

http://news.bbc.co.uk/to...wsid_9527000/9527647.stm

John Major's remarks need to be made a good deal more publicly if the UK is to begin managing its change in status from a faded past empire to a small but balanced democracy with limited military ambitions.

One thing he did not mention was our population. It is now too large to sustain whether we have more manufacturing activity or not. Our housing crisis is supporting property prices that are absurdly high, even after significant falls outside the Capital. A recent TV programme by John Snow illustrated the failure of the rebuilding schemes in Stockport due to council underfunding and community break-up and the apalling and criminal issue of illegal immigrants forced to share sleeping quarters in backyard sheds in some major cities.

All the suggestions made in this forum about providing a better environment for new start-ups and encouragement for growing manufacturers are well made. The overriding issue, however, is that our underlying political and social infrastructure needs radical change. We must stop acting out these 19th Century fantasies of Empire and take a hard cold look at what we can and cannot afford. If we were not spending huge sums on military adventures, acting as an international philanthropist, pretending we can absorb the world's disadvantaged and acting as a test bed for self-serving European lawmakers we might be able to balance our books a little better.

Perhaps we could then concentrate on educating our own population, replace our crumbling infrastructure, invest in new industry and wake up in the morning with a more robust view of what the UK stands for as an independent and competitive geography.