Budget 2015: Woodford cheers early stage business support

Budget 2015: Woodford cheers early stage business support

UK equity giant Neil Woodford has hailed comments by the chancellor George Osborne which pledged support for the UK’s research-based commercial start-ups.

Mr Woodford said support for innovative new businesses could help the country rid itself of the economic shackles which have restrained it since the depths of the financial crisis.

“We passionately believe that it is through the development and commercialisation of new, disruptive technology that we can hope to break free from the post-financial-crisis economic stagnation that currently afflicts the western world,” Mr Woodford said.

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“Any support for the knowledge economy should be welcomed as it allows a more optimistic view of our long-term economic prospects.”

In the chancellor’s Budget, it said the government would provide the UK’s “world-leading research institutes with greater freedoms to attract the brightest minds, re-invest commercial income, and develop cutting-edge technology”.

This would seem to align with Mr Woodford’s thoughts on the need to support early-stage businesses, which will be a key focus of his forthcoming Patient Capital investment trust.

Investment Adviser reported last month that government policy officials had been knocking on Mr Woodford’s door in an effort to better understand how they can support the UK’s early-stage businesses and it seems his views may in part have been considered in the Budget.

“There were some very supportive initiatives designed to help the long-term development of the UK’s ‘knowledge economy’,” Mr Woodford said.

“The Government aims to give the UK’s world-leading research institutions greater freedom in which to continue to develop cutting-edge technologies. It also wants to ensure that regulations do not restrict innovation and, in particular, the development of disruptive technology.”

The Budget said the government wanted to make sure academics and researchers were “appropriately rewarded when they contribute towards valuable intellectual property used in spin out companies” - again, something Mr Woodford has a keen interest in having supported businesses which emerged from Oxford University research.

“The government will therefore review the availability of capital gains tax (CGT) entrepreneurs’ relief on disposals by academics of shares in such companies,” the chancellor said.

“The government wants to ensure that regulations do not restrict the creation of valuable and innovative products, services and business models. The government will therefore engage with business to determine where regulations inhibit innovation, including disruptive technologies, and develop a programme for addressing this in the next Parliament.”